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ARM Holdings announced on Monday that for the fourth quarter ended 31 December, revenues rose 35 percent over the same period in the previous year to STG40.2 million, with profits also up some 38 percent to STG13.8 million or STG0.09 per fully diluted share.
For the full year ARM's revenues soared 45 percent to STG146.3 million, and pre-tax profits were up 42 percent to STG50.3 million, or STG.033 per diluted share. The earnings per American depository share (ADS), each of which represents three shares in the company, were STG.145.
During the year ARM made what it said was a "small profit" when it disposed of its interest in Dublin-based chip systems designer Parthus, which reports its fourth quarter results on Wednesday. Parthus, which cut around seven percent of its workforce in December as part of its drive to attain profitability, is expected to announce a small rise in quarterly revenues compared to the third quarter.
For ARM in the fourth quarter, royalty revenues stopped their decline, rising slightly to STG6.8 million from STG6.4 million the previous quarter. But royalty revenues were still down more than 16 percent over the same period the previous year.
"Licensing activity in the fourth quarter continued to be strong, with 15 licenses signed," Warren East, ARM's chief executive officer, said in a statement. "We were also very pleased by the growth in fourth quarter royalty revenues compared to the third quarter 2001. While unit shipments from our semiconductor partners were slightly lower than in the previous quarter, royalty revenues were up seven percent due in part to better royalties on higher value semiconductor products using ARM9TM family core technology."
East said that ARM had seen a promising start to 2002, "with a number of new licensing deals and good prospects in the pipeline."
Chief financial officer Jonathan Brooks also said he was "cautiously optimistic" about the company's business, and said that ARM's strong financial position meant it could maintain its expenditure on research and development. The company is currently carrying construction on 35,000 square feet of new office space in Cambridge to cope with the anticipated expansion of its R&D activities. ARM has consistently spent about a quarter of its revenues on research and development, or around STG37 million during 2001.
Revenues for ARM's services division were up slightly to STG4.9 million during the fourth quarter, covering consulting services, maintenance and training fees, compared to STG4.4 million in the same period the previous year.
In the second quarter of the year, ARM opened a US office in Detroit to improve its links with the automotive industry, and later this year the company will officially open its new sales office in China.
ARM's results come against a backdrop of real pain in the worldwide semiconductor industry, which saw sales plummet 30 percent last year compared to 2000.
But the Semiconductor Industry Association (SIA) said demand is expected to recover this year and sales should grow six percent during 2002. Analysts have cautiously predicted a slow recovery for the sector in the second half of 2002.
In January the first signs that the rot had stopped came from the SIA's three-month figures, which showed the second straight month of growth in worldwide semiconductor sales in November. The SIA said that sales in November rose to USD10.60 billion, a month-to-month increase of 1.6 percent. Of all territories Europe showed the biggest growth in November, with sales rising 5.3 percent over the previous month.
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