ARM holds the line in Q3 2009, outperforms chip industry
ARM Holdings plc, the leading semiconductor intellectual property supplier, reported pre-tax profit for the third quarter of 2009, after adjusting for once off items, of £24.3m compared to £24.9m in Q3 2008.
Total dollar revenues were $123.0m, down 8% versus Q3 2008. Overall semiconductor industry revenues are forecast to have declined about 18% in the same period, suggesting an increase in ARM's market share.
Thanks to the strength of the dollar against sterling, revenues in local currency were £75.2m, up 5% on Q32008.
Year-to-date dollar revenues were $349.4m, down 12% on 2008.
The Cambridge-HQed firm's share price was down slightly after the news, but remains trading near year highs. Its market capitalisation is now around £1.87 billion.
CEO Warren East said: "Q3 was a good quarter for ARM. Despite pressure on customers' R&D budgets we are pleased that continuing strong demand from industry leaders, combined with our broadest range of products and effective use of licensing models, has delivered a record number of processor licenses.
"We are particularly encouraged by the licensing of ARM's next generation processor technology, and by the first license to a leading fabless semiconductor company of ARM's advanced 28nm physical IP. Such agreements are the drivers of ARM's long-term royalty growth, and as ARM becomes the technology of choice in smart, connected and low-power consumer electronic devices we continue to gain market share.
"Once again we have demonstrated the resilience in the ARM business model; our improving revenue and disciplined cost control has delivered a sequential improvement in margins and profitability, as well as a high level of cash generation."
Outlook
ARM said that going into the final quarter of 2009, it is encouraged by the improving confidence in its customer-base, and it reiterated guidance that it expects dollar revenues for the full year to be at least in line with market expectations.
"Although, in the short term, the trajectory of consumer demand for electronic devices remains unclear, looking ahead through 2010, ARM is well-positioned to take advantage of the generally anticipated improvements in the semiconductor industry," the company said.
