ARM says pre-tax profit, revenue down slightly in 2Q; on track for FY08 revenue growth
Chip designers ARM Holdings plc said pre-tax profit for 2Q08 was £21.1m and revenue was £65.0m in a trading update statement of limited detail made to the Stock Exchange.
These represented falls of 1% and 6% respectively in the quarter but the Group said it still expected to at least match last year's dollar revenue growth rate of 6.3%.
Its share price shed 5% on the news, after gaining in recent days. The iconic Silicon Fen group is now worth almost £1.2 billion.
ARM said it released the trading statement due to "an inadvertent disclosure of our Q2 2008 headline numbers". It will release a full set of results 30 July.
CEO Warren East said: "ARM has made good progress in the first half of 2008 in challenging market conditions, further extending the group's backlog which was already at record levels.
"We see continued strong demand for ARM's technology including long-term commitments for our processor and physical IP technology by industry leaders.
Prospects for PD licensing in H208 are promising notwithstanding the uncertain current trading environment. We have a broad product portfolio that our customers are designing into applications from mobile computers to microcontrollers. We are encouraged by our second successive quarter of sequential growth in PIPD as we build momentum in that business.
"Growth of more than 25% year-on-year in underlying royalty revenues for both PD and PIPD provides further evidence of the increasing use of ARM's technology in a rapidly broadening range of consumer electronics products.
"Whilst investing in future technology innovation, we continue to exercise financial restraint, reducing overall operating costs and headcount, thereby increasing margins sequentially; generating record levels of cash within the quarter; and increasing the interim dividend."
The groups, which has it chips in a wide range of consumer electronics produced by household names, said it reiterated the guidance for FY08 given in both February and April; assuming no further deterioration in the trading environment, and that it continued to expect to increase dollar revenues in FY08 by at least the growth rate achieved in FY07.
