Cambridge based computer chip designer, ARM Holdings, has beaten market expectations with its second quarter results, as demand for its intellectual property continues to make it a British technology success story.
Revenue for the second quarter was £135m, up 15% on the same period of 2011 and better than the consensus forecast of £129m.
Profits before tax between April and June were £66.5m, 23% ahead of the prior year and, again, ahead of market expectations of £57.8m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
ARM, which designs the chips used in iPads and iPhones, gets its money by doing the research and development that its clients would otherwise have to do themselves. Its income is split into licensing, when companies buy the designs, and royalties, when customers pay a fee when they make the chips.
Licensing accounted for £67m in revenues for the second quarter; royalties were worth £96.3m.
The interim dividend has been set at 1.67p per share, 20% up on 2011.
Warren East, Chief Executive Officer, said: "ARM's royalty revenues continued to outperform the overall semiconductor industry as our customers gained market share within existing markets and launched products which are taking ARM technology into new markets.
"This quarter we have seen multiple market leaders announce exciting new products including computers and servers from Dell and Microsoft, and embedded applications from Freescale and Toshiba."
The encouraging results saw ARM's share price climb 3.34% by 8:59.
BS
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
