Royalties up 27 per cent as use of smartphones and tablets grows
Shares in British chip designer ARM closed more than seven per cent higher last night [23rd October 2012] after it reported better than expected Q3 results, much of it buoyed by sales of smartphones and tablets, especially Apple devices. The Cambridge-based company beat consensus revenue and pre-tax profit expectations to see turnover hit £145 million in the quarter compared to £120 million for the same period last year.Royalties from the 2.2 billion ARM-designed chips rose 27 per cent, against an industry average of four per cent.
“As we move into an ever more connected world of mobile computing, cloud-based networks and the internet-of-things, ARM is seeing increased demand for its high performance and low power technology,” CEO Warren East told investors.
In the past year ARM sales have risen more than a fifth, making one of the most highly rated stocks in the in the top 100 FTSE index.
The group, which has benefited from the shift from laptops – which largely use Intel-made chips, to devices such as the iPad and Samsung’s Galaxy Note which use its technology.
However, ARM reiterated an earlier warning that there would be only a “moderate” increase in revenues in Q4 due to the “unusually good trading” in the final three months of 2011.
Last night ARM’s shares stood at 640p, close to its record high for the year.