OT? INTC may use the Strong arm for Iband? Could the same one day activity happen to ANCRs I band offering someday?
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 NewsWatch
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.
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02/01/2000 4:23:24 PM ET
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) rose 275 pence to 3,650. In early New York trading, shares were up 16 1/4, or 10.2 percent, to 175.
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.
U.S.-listed shares of Arm Holdings
"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), Intel (intcw), Lucent (lu) and Texas Instruments (txn). |
