ARM Holdings Plc Profits Climb 32%


ARM’s chips can often be found in Apple’s products

The shares of ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) fell 33p to 896p during early trade this morning after the technology firm today announced its fourth-quarter and yearly results.  

The FTSE 100 member, which designs microprocessors for household gadgets and devices, reported full-year profits before tax had risen £88m, or 32%, to £364m.

The statement also highlighted revenue for 2013 had climbed 24% to £715m and revealed that earnings per share were 20.6p, a 40% increase over the previous full-year results.

ARM claimed licencing income gained 32% and royalty revenue advanced 18%.

The company’s annual dividend payment is 5.7p per share, up 27%.

Simon Segars, ARM’s chief executive, said:

“ARM’s strategy is for our technology to continue to gain share in long-term growth markets, such as smartphones, tablets, enterprise equipment and embedded computing, and to increase the royalty percentage ARM receives from each device. 

“In 2013, we continued to improve profitability and increase returns to shareholders at the same time as investing in both R&D and the business infrastructure that underpins our future growth. 2014 brings exciting opportunities and challenges as ARM competes in new markets where we are well positioned to succeed with our leading technology, innovative business model and thriving ecosystem of Partners.”

Mr Segars added that ARM’s partners reportedly shipped “2.9 billion ARM-based chips, a record number despite slower growth of chips for premium smartphones.”

Of course, whether today’s full-year results as well as the wider prospects for the microchip sector both combine to make ARM a ‘buy’ right now is something only you can decide.

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> Douglas does not own any share mentioned in this article.