A Very Good ARM quarter ...
.... that disapointed based on a relatively small revenue miss.
"ARM Holdings plc (NASDAQ:ARMH) posted its quarterly earnings results on Tuesday. The company reported $0.06 EPS for the quarter, meeting the Thomson Reuters consensus estimate of $0.06. The company had revenue of $195.50 million for the quarter, compared to the consensus estimate of $197.27 million. During the same quarter in the prior year, the company posted $0.05 earnings per share. The company’s quarterly revenue was up 6.3% on a year-over-year basis. ... ARM Holdings plc (NASDAQ:ARMH) opened at 41.56 on Tuesday. ARM Holdings plc now has a 52 week low of $37.75 and a 52 week high of $55.26. The stock’s 50-day moving average is $44.36 and its 200-day moving average is $45.32. The company has a market cap of $19.514 billion and a P/E ratio of 76.12."
I made a small add to my LT core position at very near that 19 month low hit Tuesday afternoon.
>> ARM Holdings Profit Swings Higher (2nd Update)
Lisa Fleisher
Wall Street Journal (London)
10/21/2014
morningstar.com
British semiconductor designer ARM Holdings PLC reported a sharp rise in third-quarter profit, but the results disappointed investors expecting a more robust rebound in revenue linked to smartphone sales.
The Cambridge, England-based company reported healthy demand for high-tech chips for mobile phones and a pickup in chips for so-called smart objects. But ARM, which designs technology found in chips in more than 95% of all smartphones, has had to weather an uncertain period in the smartphone industry. Growth in higher-end smartphones has been slowing, while inexpensive smartphones have begun to proliferate in emerging markets. That's weighed on shares for much of this year.
ARM said Tuesday that demand in that core business has continued to grow. Third-quarter revenue from royalties, which ARM earns when chips based on its technology are shipped, rose 11% over the same period a year earlier.
But investors had expected a stronger rebound from a sluggish first half. Shares closed down more than 5% after falling as much as 8.7% during the day.
Net profit for the three months to Sept. 30 increased to GBP64.8 million ($104.8 million) from GBP48.5 million a year earlier on a 6% rise in revenue to GBP195.5 million.
"The revenue was a little bit weaker than what we were looking for, but in the general scheme of things it wasn't a massive miss," said Nick James, an analyst at Numis. "The big question is, well, where do we go from here?"
ARM said one encouraging sign was the strong sales of Apple Inc.'s iPhones, which Apple said Monday rose 16% in the third quarter compared with the same period last year, helped by the rollout of iPhone 6.
"When you see things like the iPhone 6 selling well, that is a good, healthy sign overall for smartphones and for ARM's royalties," ARM Chief Financial Officer Tim Score said. The revenue based on those sales won't show up in ARM results until the first quarter of 2015, he said.
"The underlying story there is that all smartphones are being brought to the market with more and more ARM technology within them," Mr. Score said.
In the first half of the year, ARM reported a slowdown in the growth of revenue generated by sales of smartphones using its technology. It attributed that to a decline in new sales while companies tried to sell off their inventory of older-model phones.
ARM said the number of chips shipped based on its technology rose to 3 billion, up 19% from a year earlier. About a third of those are in connected objects, such as health monitors, light bulbs or other products that are increasingly collecting and transmitting data about the use of the products.
The chips in those devices generally cost less and provide ARM with less royalty revenue per chip shipped. The company said it expects the number of chips shipped for those products to outpace more advanced chips for such products as phones.
Last month, ARM said it had begun to promote a more sophisticated chip design that would allow manufacturers to give products more advanced functions, such as flashier displays or more advanced audio. The company also introduced a few new products, including an operating system used on chips, to try to speed up the development and use of "smart" products. ###
- Eric L. - |
