Yahoo Finance Chipmaker ARM Holdings Sees Q2 Profit Up 30%
British smartphone chip designer ARM Holdings (LSE: ARM.L - news) has seen a 30% rise in second quarter pretax profit, boosted by demand for its latest processors and graphics technology.
In the first set of results since Simon Segars took over as chief executive from Warren East on July 1, the Cambridge (SES: E1:J91U.SI - news) -based company reported pretax profit of £86.6m on revenue up 26% to £171.2m.
Both figures were ahead of analysts' forecasts.
ARM has outpaced the wider semiconductor market for the past five years or so, helped by the dominance of its processor architecture in smartphones and tablet computers.
There have been some signs of softness at the top end of the smartphone market, marked by weaker than expected sales of Samsung's flagship Galaxy S4 smartphone.
However, Apple (NasdaqGS: AAPL - news) revealed its latest figures on Tuesday and said it had seen a 20% rise in quarterly iPhone sales compared to the same period last year.
ARM finance director Tim Score said that he expected the smartphone market to remain strong, though the 50%-plus growth rates of recent years were easing down.
But ARM did not rely on the top end of the market, according to Mr Score.
He said. "All smartphones contain more ARM technology than less sophisticated phones and therefore generate higher royalties."
Shares in ARM reached a high of £11.11 in May, exceeding the level they were trading at in the dotcom boom of 2000.
They have since come off by about 20%, but were up 3.34% in early Wednesday trades to £9.27.
ARM said its global partners signed 25 licences for its technology in the quarter, including five for its latest Cortex-A designs and seven for its Mali graphics technology.
Processor design licensing revenue rose 34% year on year to £56.9m, comfortably beating market expectations.
The company has been increasing its share of the graphics processing market, and on Tuesday Samsung said it had selected Mali for its latest high-end processor, ousting rival Imagination Technologies (Other OTC: IGNMF - news) .
Royalties from chips shipped by partners, such as Qualcomm and Texas Instruments (NasdaqGS: TXN - news) , reported a quarter in arrears, rose 26% year-on-year to £77.7m, broadly in line with expectations.
Meanwhile British semiconductor materials maker IQE (LSE: IQE.L - news) estimated first-half revenue to grow more than 80%, driven by strong performance at its core wireless business that it recently bulked up with acquisitions.
The wireless business accounts for more than three-quarters of revenue at IQE, whose products are used in microchips in smartphones, tablets, GPS equipment as well as light-emitting or light-detecting devices.
IQE bought the wireless unit of US-based Kopin Corp (NasdaqGS: KOPN - news) in January and a wafer manufacturing unit from RF Micro Devices Inc (NasdaqGS: RFMD - news) in June last year.
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