Dear mrc, wonderful news!!! I am delighted with 4th QTR. and yearly results.
ARM shares soar as profits double Company proposes 5-for-1 share split
By Barbara Kollmeyer, CBS MarketWatch
Last Update: 12:01 PM ET Jan 31, 2000
LONDON (CBS.MW) -- Shares of U.K. microchip maker ARM
Holdings surged 8.2 percent Monday after the group said pretax profits
doubled in the fourth quarter. It also announced plans for a 5-for-1 stock
split.
In the fourth quarter, ended Dec. 31, ARM
Holdings' pretax profits jumped 119 percent to 6.6
billion pounds ($10.7 million) from 3 million pounds
($4.9 million) in the same period of 1998.
REVENUES rose 52 percent to 18.9 million pounds
against 12.5 million pounds in 1998.
In London, shares in ARM Holdings (ARMHY:
news, msgs) rose 275 pence to 3,650. In early
New York trading, shares were up 16 1/4, or 10.2
percent, to 175.
(EARNINGS INCREASE: 20.8 cents US in 4th QTR vs. 4.5 cents in 1998)
Earnings per fully diluted share were 4.3 pence
(20.8 cents per U.S.-listed share) in the fourth
quarter, vs. 0.9 pence, or 4.5 cents, in 1998.
The company said its board of directors will
propose the share split at its general meeting on
April 18.
Licensing is key
The company said royalty revenues were a major
factor in boosting operating margins from 18 percent in 1998 to 25
percent in 1999 as a whole. In the fourth quarter, royalties constituted 23
percent of total revenue, up from 17 percent in the same period of 1998.
But Jonathan Brooks, chief financial officer with ARM Holdings, told
CBS.MarketWatch.com that the company still views licensing revenue
as its major revenue stream.
"We want to continue
driving the licensing
business rather than
sitting back and
watching the royalties
come in," he said.
Licensing revenue is a
one-off payment that
comes at the time the
company signs a
license, while royalties
come through every time a chip is sold with an ARM microprocessor.
ARM Holdings designs, licenses and markets microprocessors for
devices that require low power, such as mobile phones and hand-held
computers, as well as set-top boxes. The company said shipping volumes
for its products surged from 51 million units in 1998 to around 175 million
units in 1999.
ARM collaborates with such big names as Ericsson (ERICY: news,
msgs), Intel (INTCW: news, msgs), Lucent (LU: news, msgs) and Texas
Instruments (TXN: news, msgs).
Barbara Kollmeyer writes for CBS MarketWatch in London.
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