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Technology Stocks : ARM Holdings (Advanced RISC Machines) plc. -- Ignore unavailable to you. Want to Upgrade?

To: Neil H who wrote (796)	4/20/2004 10:18:46 AM
From: Neil H	Respond to of 912

EUROPEAN BUSINESS NEWS ARM Holdings PLC ADS (ARMHY) ARM Posts Strong Earnings, Issues Confident Outlook By NIC FILDES DOW JONES NEWSWIRES April 20, 2004 9:50 a.m. LONDON -- ARM Holdings PLC Tuesday reported solid first-quarter results backed by a confident outlook for the full year. The Cambridge, England-based semiconductor-technology company said its pretax profit increased 54% in the latest quarter to £9.4 million ($17 million or €14.1 million), up from £6.1 million in the year-earlier quarter. Revenue rose 13% to £35 million from £31 million. ARM said the weakness of the U.S. dollar against sterling reduced first-quarter revenue by around £2.1 million. The company said the first-quarter strength was helped by growth in license revenue, which increased 8.5% to £14 million from £12.9 million in the previous quarter. ARM Finance Director Tim Score said on a conference call that the company feels more confident following the strength of the first quarter. "I expect 2004 to be stronger than 2003. The sales pipeline is pretty strong and I expect license revenue to continue to grow," he said. ARM makes the core processing technology used in the semiconductors embedded in a variety of electronic devices, including mobile phones and personal digital assistants, or PDAs. The first quarter is seasonally strong for ARM because its financial results reflect sales made during the Christmas period when shipments of ARM-based devices are particularly robust. As a result, Mr. Score said royalty revenue in the second quarter may not match the growth recorded in the first three months of the year. First-quarter royalty revenue totaled £13.4 million with record unit shipments of 278 million units, up from £12.8 million and 236 million units in the fourth quarter. Average royalty rates fell to 8.7 cents from 9.2 cents in the fourth quarter as a result of an increased proportion of ARM7-based units in its customers' shipments. ARM7 is an older product and accrues a lower royalty rate than ARM's higher-value processors. Nevertheless, ARM reported an increase in the proportion of its royalty revenues from ARM9-based devices to 16% and signed up two new customers for its ARM11 architecture. Mr. Score said he expects the slight drop in average royalty rates to reverse during the year as smart mobile phones -- which have more functionality built into the handset and use more than one ARM processor -- will account for a greater proportion of its royalty revenues. Mr. Score said he expects around 50% of the company's backlog of orders to be recognized as revenue by the end of the year.