ARM's weak Q4 outperforms the market

LONDON — Processor IP licensor ARM Holdings plc (Cambridge, England) reported falling profits and sales for the fourth quarter and full year ended Dec. 31, 2009, but the company said it expects to see improving conditions in 2010.

ARM's fourth quarter revenue was $140 million, down 6 percent from $149.4 million in the same quarter a year before. Profit before tax fell 3 percent to £32.3 million (about $51.5 million) in the fourth quarter compared with £33.4 million (about $53.3 million) a year earlier

For the full year the company achieved dollar revenue of $489.5 million, down 10 percent from $546.2 million in 2008. However, ARM reports its licensing revenue a quarter in arrears so that shifted the impact of the economic crash to line up with its financial year. For the full year profit before tax was down 4 percent at £96.8 million (about $154 million); a fall from £101.0 million (about $160 million) a year before.

"We are pleased that in Q4 ARM has continued to outperform the semiconductor industry as we gain market share," said chief executive Warren East, in a statement. "Despite industry dollar revenues being down about 20 percent in the relevant period, ARM market share gains resulted in dollar revenues being down 10 percent with on-going financial discipline maintaining normalized operating margins over 30 percent and delivering strong cash generation."

East described ARM as being "well-placed" for strong performance to continue. "Semiconductor manufacturers are increasingly designing ARM technology into their products, and as ARM technology becomes ever more pervasive in markets with long-term structural growth such as smart phones, digital TVs and microcontrollers," he said.

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