ARM Holdings — supplier of microchips for Apple’s iPhone and iPad products, Samsung’s Galaxy line and soon technology for Microsoft’s Windows 8 devices — continues to report strong results while riding the wireless device boom and expanding to newer areas. The company reported Q2 earnings (ended June 30) of £135.5 million ($213 million), beating analyst estimates of $206 million. Net profit was up by 48 percent, to £39.4 million compared to £26.6 million for the same quarter a year ago.
Pointedly, the company is gearing up for continuing good fortune, at least for the next quarter: It says it has a “record order backlog” that will let it ride well into Q3, but cautioned that macroeconomic uncertainties may impact what happens in Q4.
“Macroeconomic uncertainty may impact consumer confidence, and some analysts have become less confident in the semiconductor industry outlook in the second half,” it noted in a statement. But it noted that it expects overall revenues for 2012 to be in line with market expectations. That consensus currently is for full-year revenues of $860 million.
Macroeconomic conditions were also an issue raised yesterday evening by Apple’s CEO Tim Cook during Apple’s Q3 earnings call. Apple views the problem to be mainly to Europe, with Cook noting that it didn’t seem to be impacting activity in other markets like China and the U.S. But he also noted that the European affect was being felt on the bottom line as a whole.
Overall, in Q2 ARM shipped 2 billion chips that were used in “a wide range of applications.” That number, it said, was up 9 percent year-on-year, while with industry shipments are actually down four percent. Indeed, ARM’s rival Intel last week reported a five percent increase in revenues to $13.5 billion but also noted that it saw a slowdown in sales due to people holding off purchases until the release of Windows 8.
ARM also noted that processor royalties grew 14 percent year-on-year compared with a decline in industry revenues of 7 percent.
In a statement, CEO Warren East noted that ARM’s royalty revenues are currently outperforming the wider semiconductor industry as ARM extends beyond the wireless devices that have helped make its name.
“This quarter we have seen multiple market leaders announce exciting new products including computers and servers from Dell and Microsoft, and embedded applications from Freescale and Toshiba,” he noted.