ARM shares slide at end of an era
ARM Holdings had a good day, that turned into a bad day, that underlined the stock’s underlying weakness. After the British semiconductor designer reported a […]
ARM Holdings had a good day, that turned into a bad day, that underlined the stock’s underlying weakness. After the British semiconductor designer reported a […]
ARM Holdings had a good day, that turned into a bad day, that underlined the stock’s underlying weakness.
After the British semiconductor designer reported a 9% jump in third-quarter pre-tax profit to £101.2m this morning, its shares gained 4%, at the time the biggest rise on the UK’s benchmark FTSE 100 index.
But the stock reversed within hours and continued to slide.
Its stock closed as the worst-performer on the main board, down 5.3% at 796.94p.
And ARM’s highly liquid American Depository Receipt (ADR) traded almost 6% lower at $39.11, by early evening London Time.
This is despite the firm, which has an almost unique business of semiconductor design licensing and royalties, saying it saw strengthening demand and growth.
Revenues, denominated in dollars, came in at $320.2m, up 12%.
Market expectations were $326.3 million.
ARM chief financial officer Tim Score said earlier, strong iPhone sales were “helpful” for the short-term outlook and supported by data from ARM’s other manufacturing partners.
“We certainly have seen an uptick in mobile,” he said at a press conference.
He expected Q4 dollar revenues to be in line with market expectations of about $350 million.
Processor royalties would continue to grow in the mid-teens as more of ARM’s latest technology was deployed in consumer products, Score said. Growth was 11% in Q3.
But the predicted recovery would still be weaker than the 19% growth ARM forecasted earlier in the year.
ARM investors seem unconvinced by the firm’s reassurances.