NEWS SNAP: ARM Hldgs 4Q Pft Buoyed By Mobile Phone Sales
By SAI MAN
January 31, 2006 5:08 a.m.
LONDON -- U.K. semiconductor developer ARM Holdings PLC (ARMHY) Tuesday reported higher fourth-quarter earnings amid rising sales from chips for mobile phones and digital music players.
Stripping out acquisition-related charges, stock-based compensation and related payroll taxes, pretax profit rose 68% to GBP23.7 million in the three months to Dec. 31 from GBP14.1 million a year earlier.
Net profit, under U.S. generally accepted accounting principles, advanced to GBP13.0 million from GBP4.5 million.
The company said profits were boosted by revenues expanding at twice the rate of the semiconductor industry, due to phenomenal growth in demand for its chips, which power more than 80% of the world's mobile phones.
ARM's sales grew 51% to GBP62.9 million in the period. The company said its new flagship Cortex product will underpin license revenues in 2006.
For 2005, ARM said pre-items pretax profit jumped 69% to GBP81.3 million as revenue rose 52% to GBP232.4 million. One trader, who declined to be named, said the full-year results brought no surprises.
At 0936 GMT, ARM shares were down 1.7%, or 2.25 pence, at 131.25 pence in a slightly lower overall market.
The company, which counts Intel Corp. (INTC) and Samsung Electronics Co. Ltd. (005930.SE) among is customers, said it shipped a record 499 million units during 2005, with mobile phone-related products up 23% on year.
Non-mobile units rose even faster, it said, with the growth in digital consumer products like Apple Computer Inc.'s (AAPL) iPod music player and cameras helping unit shipments swell by 46% on the year.
"There's a rapid proliferation of our technology," Chief Financial Officer Tim Score said in a telephone interview with Dow Jones Newswires. "We have a habit of growing faster than the semiconductor industry as a whole as we ride the digital technology wave."
Score said the company doesn't give specific quarterly guidance but added that he expects to see sequential revenue growth continue in the first quarter.
For 2006 as a whole, the growth in royalty income is expected to continue its momentum from 2005, he said, while ARM's product portfolio has "rich potential" for licensing.
The company's latest products will enable consumers to watch high-quality digital television over the next generation of mobile phones. |
