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ARM raises revenue, profit in Q4, sees growth in 2009

February 03, 2009 //

Processor technology licensor ARM Holdings plc (Cambridge, England) was able to benefit from a one-quarter delay inherent in its way of recognizing IP revenue and turn in positive Q4 and full financial results. While acknowledging the Q4 downturn seen elsewhere ARM was positive about its own prospects in 2009.


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LONDON Processor technology licensor ARM Holdings plc (Cambridge, England) was able to benefit from a one-quarter delay inherent in its way of recognizing IP revenue and turn in positive Q4 and full financial results. While acknowledging the Q4 downturn seen elsewhere ARM was positive about its own prospects in 2009.

The company's accounts are confusing because of the tradition of posting in both dollar and sterling with effective rates of exchange as well as posting normalized and U.S. GAAP results. At a time of exchange rate stability that would be difficult enough but with the wild swings exhibited recently it makes result reading even tougher.

In Q4 2008 ARM's revenues were $149.4 million, up 15 percent year-on-year. However in sterling terms they were 94.4 million, up 47 percent. Similarly the normalized profit before tax was 33.4 million (about $47 million) up 57 percent but the U.S. GAAP profit before tax was 23.6 million (about $33 million) up 105 percent.

But overall, compared with semiconductor companies that have almost universally been showing declining revenue and making losses these are positive results. So having generated 29.6 million (about $42 million) in the quarter ARM decided to increase the final dividend by 10 percent.

For the full year ARM announced revenue of 298.9 million (about $425 million) up 15 percent compared with 2007. The profit before tax was 100.8 million (about $143 million) on a normalized basis but only 64.8 million (about $92 million) on a U.S. GAAP basis.

Despite these exceptionally healthy financial results ARM had noticed that semiconductor industry slowed markedly in Q4 and commented that "the near-term outlook for the sector remains uncertain." While expressing confidence that intellectual property licensing is a good business ARM said that, unless business conditions deteriorate further than generally anticipated, the company expects dollar revenues for 2009 to be around $460 million, which would represent an 8 percent increase on 2008.

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