ARM Holdings plc (ADR) (NASDAQ:ARMH) EPS Growth Fails To Impress Markets


Dallas, Texas 04/24/2014 (FINANCIALSTRENDS) –  ARM Holdings plc (ADR) (NASDAQ:ARMH), which is a U.K based semi conductor major reported its 1Q14 operation results on 23rd April, before markets opened. The results which reported an increase in the revenue and net income for the quarter, did not enthuse the market players since it did not meet the aggressive estimates forecasted by analysts ahead of the earnings call. Hence, the stock saw its share price drop by close to 5 percent through the day’s trading.

The highlights of the earnings call are as follows.

The 1Q results came in at $305.2 million, which represents a 16 percent increase over its 1Q13 revenue. It reported earnings per share of $0.28, which translated into a 17 percent increase over 1Q13 numbers. The markets reacted negatively to these figures, since the EPS in 1Q is the weakest the maker of chipsets which go into the making of smart phones and tablets has reposted in the past 6 quarters.

CEO Speak

In his statements which reflected the changing needs of its customer, ARM Holdings plc (ADR) (NASDAQ:ARMH) Chief Executive Officer and Executive Director Simon Segars has been quoted to have said that, “The first quarter of 2014 saw particularly strong uptake of ARM’s most advanced ARMv8 processor technology with five licenses signed by four semiconductor companies. These customers are planning to develop chips for automotive infotainment systems, carrier networks and high performance computing. During the quarter we saw announcements from Marvell, Mediatek and Qualcomm to this effect.”

Other Key Take Away

The other key take away from the earnings call was that ARM Holdings plc (ADR) (NASDAQ:ARMH) license sales went up by a huge 37 percent, primarily buoyed by the increase in its net new license sales and small increase in its revenue from royalty. It has provided estimate that the sales will dip as per traditional cyclical trends in 2Q and pick up in 3Q and 4Q.

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