21st Oct 2014 06:50
LONDON (Alliance News) - ARM Holdings PLC Tuesday said it expects to meet market expectations of around USD350 million in revenue for its fourth quarter, as it saw pretax profit rise on higher revenue in its third quarter to end-September.
The chip maker posted a pretax profit of GBP79.2 million for the quarter to end-September, up from GBP68.3 million a year before, as revenue rose to GBP195.5 million from GBP184.0 million.
This brings its total pretax profit for the first nine months to GBP225.1 million, up from GBP150.4 million, as revenue rose to GBP569.3 million from GBP525.5 million, and exceptional costs of GBP41.8 million did not recur.
Royalty dollar revenues were up 9% in the quarter, representing around 47% of its total revenue. Average royalty revenue per chip was USD4.5 cents, down from USD4.9 cents a year before, as its lower cost microcontrollers and smartcards grew faster than its higher value chips into smart phones and tablets.
Licence dollar revenues rose 16% in the quarter, representing around 45% of total revenue. The company said its order backlog at the end of the quarter was down slightly, but it expects that its licensing opportunity pipeline will lead to higher level of backlog by the end of the year.
ARM signed 43 processor licences in the quarter across mobile computing, enterprise infrastructure and embedded devices.
The company said it enters its final quarter with a "robust opportunity pipeline" suggesting strong licence revenues for its fourth quarter and an increase in its order backlog, and market data is underpinning its short-term outlook for royalty revenues.
"Quarter three has seen accelerating royalty revenue growth and strong demand for our processors and physical IP. We have seen encouraging license momentum and design activity throughout our customer base, with more Partners choosing to deploy ARMv8-A architecture in multiple end markets," said Chief Executive Simon Segars in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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