ARM Holdings plc (LON: ARM) reports bumper first-quarter results.
The shares of ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) soared 73p, or 8%, to 942p during early London trade this morning after the FTSE 100 member announced first-quarter profits had surged 58%.
ARM, which designs and licences microchips for mobile phones and other digital devices, said its earnings had advanced from 3.36p to 5.31p per share during January, February and March.
The company also said its first quarter had seen the number of ARM-based chips shipped by customers rally 35% to 2.6 billion. The progress helped ARM's Q1 revenue improve 28% to £170m and pre-tax profit climb 44% to £89m.
ARM's net cash position improved by £42m during the three months to finish the quarter at £562m.
Warren East, ARM's chief executive, said:
"ARM has delivered another quarter of strong revenue and earnings growth, driven by robust licensing and record royalty revenue."
"ARM's royalty revenues again outpaced the wider semiconductor industry. This outperformance has been driven by market share gains in key end markets including digital TVs and microcontrollers. In addition, the growth in smartphones and tablets continues to benefit ARM."
While Mr East claimed second-quarter revenues would be in line with current market expectations, he added revenues for the full year would be "at least" in line with City forecasts.
Prior to today, City experts had expected ARM to report earnings of 20p per share and a dividend of around 5p per share for 2013. Those projections currently equate to a P/E multiple of 47 and an income yield of 0.5%.
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> Maynard does not own any share mentioned in this article.