British Chip Designer ARM Holdings Posts £89.4m Pre-Tax Q1 Profit

Strong demand for smartphones and tablets allowed British chip designer ARM Holdings to report pre-tax profits of £89.4 million in its 2013 first quarter results, a 44 percent increase from the same period in 2012.

Revenues rose by 28 percent to £170.3 million, while 2.6 million ARM-based chips were shipped, a 35 percent year on year increase.

“ARM has delivered another quarter of strong revenue and earnings growth, driven by robust licensing and record royalty revenue,” said ARM Holdings CEO Warren East. “Everyday devices are becoming smarter, more connected and more energy efficient, which is increasing the applicability of and demand for ARM’s technology.”

ARM Holdings results

ARM-based chips are favoured by mobile manufacturers due to their low power consumption and are present in virtually all mobile devices. The company doesn’t make its own chips but instead licenses its designs to the likes of Samsung, Apple and Qualcomm.

During the first quarter, ARM signed 22 different licensing deals with manufacturers in the smartphone, mobile computing, digital television and wearable technology markets and expects demand for its products to continue.

“ARM’s royalty revenues again outpaced the wider semiconductor industry,” continued East. “This outperformance has been driven by market share gains in key end markets including digital TVs and microcontrollers.

“In addition, the growth in smartphones and tablets continues to benefit ARM. Even low cost smart devices can contain multiple ARM‐based chips and be based on ARM’s advanced Cortex‐A series technology and Mali graphics processors.”

ARM said that it expects group revenues for the full year 2013 to be at least in line with current market expectations.

Last month, East announced that he plans to retire at the end of June after serving 12 years as chief executive of the company. He will be replaced by Simon Segars, who has been at the company for 22 years, even longer than East’s 19 years of service.

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