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ARM Holdings Hoping To Meet Market Expectations As Q1 Profit Up(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - ARM Holdings PLC Wednesday said that, assuming the semiconductor industry improves in the second half as it expects, it remained confident it would meet market expectations for dollar revenues in 2014. The semiconductor company posted pretax profit of GBP97.1 million for the quarter to end-March, up from GBP89.4 million a year before, as revenue rose to GBP186.7 million from GBP170.3 million in the previous year. ARM said it had made an encouraging start to 2014 as it saw continued strong licensing performance, and noted that its pipeline of licensing opportunities remained healthy for the second quarter and remainder of the year. Licensing revenues were up to USD129.9 million from USD94.9 million, as ARM signed 26 processor licences across various markets, including 11 licences for its Cortex-M processors for micro controllers, smart sensors, internet-of-things and wearable technology. The company said its order backlog at the end of the first quarter was down around 5% from the previous quarter. It expects its order backlog for the end of the year to be at a similar level. Average royalty per chip was 4.7 cents, down slightly from 4.8 cents a year ago, as the product shift mixed further towards lower cost chips, such as micro-controllers, smart cards, touch screen controllers and wireless connectivity ships, and away from higher-value processors. ARM is continuing to weather the slump in high-end smartphone and tablet markets, which utilise higher value chips compared to products such as the emerging internet-of-things and wearable technology markets. Royalty revenues were hit by an inventory correction in mobile and consumer electronics, the company said, meaning that its royalty revenue growth compared to the overall industry was lower than it had seen in recent periods. Technology royalty revenues for the quarter were USD144.5 million, up from USD140.0 million. In sterling terms, technology royalty revenues declined to GBP86.8 million from GBP91.2 million. USD5 million in processor royalty revenue was deducted during the quarter due to a customer over-reporting the amount of ARM products used in its inventory. Gross margins were 95.6% compared to 95.4% in the fourth quarter of 2013. Shares in ARM were trading down 2.3% at 960.50 pence, the biggest faller on the FTSE 100 Wednesday morning. Copyright 2014 Alliance News Limited. All Rights Reserved. |