British chip designer ARM said today it reported a rise in second-quarter profits -- higher than it expected -- thanks to a sudden rush for ARM-powered smartphones and tablets.
ARM said it generated £66.5 million ($103m) in profit on revenue of £135.5 million ($210m), or 3.58 pence (5.5 cents) per share (statement), beating all analyst forecasts.
The company's net profit rose by 48 percent to £39.4 million ($61m) for the quarter ending June 30, from £26.6 million ($41.17m) a year earlier. Analysts thought ARM would expect lower growth due to tougher macro-economic conditions.
Revenue wise, ARM said it saw a 15 percent rise in quarterly revenue to £135.5 million ($209m) from £117.8 ($182m). The market expected £129.8 million ($201m) knocking a strong albeit single-digit push beyond expectations.
The firm declared an interim dividend of 1.6 pence per share (2.5 cent), up from 20 percent a year earlier.
ARM chief executive officer Warren East said in a prepared statement:
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.
On the whole, ARM is looking strong in the face of other, larger chipmakers. Intel recentlyand AMD . Despite the company's small size, with just over 2,250 employees, it continues to grow and add staff to its burgeoning roster.
But the company's outlook noted the continued deteriorating global macro-economic situation and warned consumer and enterprise spending could suffer in the second-half of the year. Crucially, in the face of Windows 8 on ARM tablets -- or Windows RT devices -- that are expected to debut later this year, ARM notes that for buyers, there may simply not be as much money to splash around.
The chip designer said its annual revenue looks as though it will fall in line with market expectations.
ARM shares closed 2.7 percent lower Tuesday at 485 pence, marking the company's market cap at £6.68 billion ($10.34bn), but rocketed at market open on the London Stock Exchange. Shares were up by close to 4 percent, breaking through the 500 pence mark.