ARM (ARM) is going gang-busters... again! First-quarter figures saw pre-tax profit soar 44% on forecast-thumping revenues of £170.3 million, beating consensus by more than £10 million and sparking an incredible 11%-plus spike to 968p, within a whisker of its all-time high.
As you might expect, the company has the seemingly-unstoppable force of mobile computing (smartphones/tablets) to thank. ARM saw 2.6 billion devices based on its designs shipped in the quarter, up 35% year-on-year and this is powering sales growth.
Royalty income hit $140 million across its PD (processor division) PIPD (physical intellectual property division) ranges, up 32%, clearly showing that hefty research and development spend is paying off with increasingly advanced technology that commands higher royalties per chip.
It worth pointing out that 'embedded' devices were up 50% compared with mobile’s overall 25% growth – underlining the increasing shift. Mali, its graphics technology, is embedded in about a quarter of its 2.6 billion Cortex processor chips, or up about five-times since the same time last year.
As outgoing chief executive officer Warren East says: 'Even low cost smart devices can contain multiple ARM-based chips and be based on ARM's advanced Cortex-A series technology and Mali graphics processors.'
That's something for Imagination Technologies (IMG), the UK's other major mobile device chip player, to worry about, perhaps. But ARM doesn't stand still for a second, it's already flagging the scope for growth in 'wearable devices,' such as Google Glasses and iWatches, which suggests product launches aplenty over the next year.
There's nothing here to imply ARM feels under the cosh from US chip giant Intel (INTC), a supposed force in mobile of the future. That comes as little surprise to me since I flagged the issue in Shares last December (read here). There is also clear scope for outperformance down the line, the company hinting as much by saying it expects to 'at least' match market expectations.