ARM not hit by smartphone slowdown

ARM Holdings has posted strong full-year results despite a global slowdown in smartphone sales

ARM not hit by smartphone slowdown

The company’s group revenues in sterling were up 19% year-on-year with normalised PBT and EPS up 17% and 14% year-on-year respectively. The directors of ARM recommended a final dividend increase of 25% to 5.63p.

Simon Segars, CEO of ARM, said: “2015 was a strong year for the shipment of chips containing advanced ARM technology, and momentum continued through the fourth quarter.

“Demand for our technology is increasing and during the quarter we signed multiple licences for the next generation of high-performance and secure ARM processors. Our increased investments in both 2015 and 2016 will help us meet demand by extending the capabilities of our technology and the ecosystem, and will support long-term growth and returns for shareholders.”

What does this mean for investors?

“British chip designer ARM Holdings has beaten a global dip in smartphone sales as it reports a 17% rise in fourth quarter profit,” Ian Forrest, investment research analyst at The Share Centre, said.

“This has been led by high demand for its processor designs in higher end smartphones as it has increased its market share over the last year. ARM’s fourth quarter sales and pretax profits beat earnings, while adjusted earnings per share were in line.

“Investors should appreciate that ARM seems fairly upbeat on its 2016 outlook, expecting to see increased demand for its ARMv8-A chips. It expects dollar revenue for this year to be broadly in line with market expectations, and predicts strong momentum for royalty revenues ahead coupled with a healthy licensing pipeline.”

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