ARM Holdings Plc, the Cambridge, UK-based RISC chip designer, sees no immediate end to the 40% to 50% revenue growth which has become the norm for the company that produces processors for mobile phones. Even the ever-increasing R&D budget is unlikely to put a brake on the growth in earnings as the operating margin was 25% in the third quarter, well up on the 16% recorded for the same period last year.
In the third quarter to September 30, net income rose 77.4% to 2.8m pounds ($4.6m) on revenue up 40% at 15.6m pounds ($24.4m); for the first nine months, profit grew by 78.3% to 7.4m pounds ($11.6m) on revenue that increased 45% to 43.2m pounds ($67.8m). Earnings per share is up 75% to 1.4 pence and, for the nine months, has risen from 68.1% to 3.7 pence.
Chairman and CEO Robin Saxby sees the company’s business model evolving with its collaboration with Ericsson on Bluetooth and its license agreement with 3Com. Having started by partnering with semiconductor manufacturers to meet OEM needs, he says the company is now working with OEMs to support end-user needs.
While other companies are working on Bluetooth chipsets (CI No 3,757), ARM is confident it can come up with what will become the world standard – and so guarantee another important revenue stream.
