ARM price seems to be going through a three month flattish period after a 1 year or so steady rise. Any views on what might happen next?

3rd Quarter Results

Q3 Financial Highlights
· Group revenues in US$ up 26% year-on-year (£ revenues up 27% year-on-year)
· PD Licensing revenue in US$ up 52% year-on-year. Order backlog up 3% sequentially
· PD Royalty revenue in US$ up 14% year-on-year (relevant industry revenues down 2% year-on-year[1])
· Normalised operating expenses of £85.6m (including a £5.5m charge relating to the foreign exchange revaluation of monetary items)
· Normalised profit before tax and earnings per share up 36% and 38% year-on-year respectively (IFRS PBT and EPS up 24% and 16% year-on-year)
· Net cash generation of £111.6 million

Progress on key growth drivers in Q3
· Growth in adoption of ARM® technology
o 48 processor licenses signed, driven by new technology, new markets and new customers
o Advanced technology enables a higher royalty percentage per chip
o 15 Cortex®-A processor licenses signed, including 3 Cortex-A50 series processors
o 5 Mali™ graphics processor licenses signed
o POP™ IP helps optimise ARM processor implementations. 4 POP IP licenses signed in Q3
· Growth in shipments of chips based on ARM processor technology
o 2.5 billion ARM-based chips shipped
o Continued penetration of processors containing both Cortex-A and Mali graphics processors

Investec Buy 980.50 1,100.00 1,100.00 Retains

Numis Reduce 980.50 800.00 800.00 Reiterates

Finncap Hold 980.50 - - Reiterates

JP Morgan Cazenove Neutral 980.50 625.00 625.00 Retain

Barclays Capital Overweight 0.00 1,125.00 1,125.00 Reiterates

Deutsche Bank Buy 0.00 1,080.00 1,130.00 Reiterates

Jefferies International Buy 0.00 1,300.00 1,300.00 Reiterates

Liberum Capital Sell 0.00 725.00 725.00 Retains

JP Morgan Cazenove Neutral 965.50 1,004.00 625.00 750.00 Retains

Appointment of New Chairman

Cambridge, UK, 27 January 2014 - ARM Holdings plc ("ARM") announces that Sir John Buchanan is stepping down as Chairman, at his request, due to a medical condition. The Board has conducted a thorough search and is pleased to announce that Stuart Chambers will join the Board today as Chairman designate and will succeed Sir John Buchanan as Chairman on 1 March 2014.

Final Results

Q4 Financial Highlights
· Group revenues in US$ up 15% year-on-year (£ revenues up 15% year-on-year)
· Processor licensing revenue in US$ up 26% year-on-year
· Processor royalty revenue in US$ up 7% year-on-year (relevant industry revenues up 2-3% year-on-year1)
· Normalised operating expenses of £88.1 million. IFRS operating expenses of £170.3 million include a non-cash exceptional charge of £59.5 million related to the impairment of an asset (see page 5 for details)
· Normalised profit before tax and earnings per share up 19% and 30% year-on-year respectively
· IFRS PBT down 79% year-on-year as a result of the exceptional charge; IFRS loss per share of 0.4 pence in Q4 2013 compared to earnings per share of 3.0 pence in Q4 2012
· Full year 2013 dividend increased by 27% to 5.7p

Progress on key growth drivers in Q4
· Growth in adoption of ARM® processor technology
o 26 processor licences signed for a broad range of applications from smartphones and mobile computers to medical devices, wearables and the Internet of Things
o Momentum continues in computing, servers and networking applications with the signing of an ARMv8 architecture licence and two ARMv8 processor licences
· Growth in shipments of chips based on ARM processor technology
o 2.9 billion chips shipped, up 16% year-on-year with faster growth in low-cost chips in entry-level mobile devices, microcontrollers and smart sensors

with the markets in freefall-funk it'll be interesting to see how sp reacts

Ex divi wed 16th Apr (3.6p)

UPDATE 1-Chip designer ARM sees smartphone recovery in second half

* Q1 pretax profit up 9 pct, broadly in line * Sees smartphone demand improving in second half * Shares down 3 pct (Adds CFO comments, analyst reaction, shares) By Paul Sandle LONDON, April 23 (Reuters) - ARM Holdings ARM.L , whose chip technology powers Apple's AAPL.O iPhone, said demand for smartphones would pick up in the second half after a disappointing end to 2013 resulted in first-quarter profit rising less than in previous years. Sales of top-end smartphones, a market dominated by Apple and Samsung 005930.KS , were lower than predicted during the Christmas holiday season, leading to worries that the market was becoming saturated. But ARM's Chief Financial Officer Tim Score said there were signs that demand was picking up for smartphones from the low-end to the top, where Samsung has just launched its Galaxy S5 flagship and Apple is expected to unveil a new iPhone later this year. The British company posted a 9 percent rise in pretax profit to 97.1 million pounds ($163.36 million), broadly in line with market forecasts, on revenue collected in dollars of $305.2 million, up 16 percent. In comparison, a year ago adjusted pretax profit jumped 44 percent. Royalty payments, which ARM receives a quarter in arrears on every chip that contains its technology, rose by an underlying 8 percent year on year, about a quarter of the growth it was seeing at the same time last year. Cambridge-based ARM said royalties were affected by an inventory correction as manufacturers used up components they had stockpiled because of weaker customer demand, particularly in mobile and consumer electronics. Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW , the world's largest contract chip producer which drives more than half of ARM's processor royalties, according to Deutsche Bank analysts, said last week it was targeting record revenue in the second quarter. ID:nL3N0N91AS "There has been an inventory correction in smartphones, that looks to be unwinding," Score told reporters on Wednesday. "We saw TSMC showing very strong guidance for their second quarter, which will inform our Q3 royalties." In the longer term, growth in companies licensing ARM's technology for uses ranging from networking equipment to microcontrollers in appliances like dishwashers would also drive royalty growth, he said. Processor licensing revenue rose 38 percent in the quarter to $111.6 million. Shares in ARM were trading down 3 percent at 951 pence at 0907 GMT, around the same level they were at in September. Analyst Julian Yates at Investec, who has a "buy" rating on ARM's shares, said the indications were for second-quarter royalties to be broadly flat on the first quarter, but he was forecasting a 28 percent rise in the second half. "We expect sentiment to improve as the market gains confidence around ARM delivering this pick-up, based on improving trends from the semi-conductor industry which we have already started to see," he said.

Haven't played these for a while - long this morning @839.7p

Finncap Buy 879.50 833.50 1,000.00 1,000.00 Upgrades

Jefferies International Buy 879.50 833.50 1,140.00 1,140.00 Reiterates

Closed +15.

Half Yearly Report

Q2 financial summary
· Group revenues in US$ up 17% year-on-year (£ revenues up 9% year-on-year)
· Processor licensing revenue in US$ up 42% year-on-year
· Processor royalty revenue in US$ up 2% year-on-year
· Normalised profit before tax and earnings per share up 9% and 11% year-on-year respectively
· Net cash generation of £86.7m
· Interim dividend increased by 20%

Progress on key growth drivers in Q2
· Growth in adoption of ARM® technology
o 41 processor licences signed across our target markets of mobile computing, consumer electronics and embedded intelligent devices, taking the cumulative number of licences signed to more than 1,100
· Advanced technology enables a higher royalty percentage per chip in mobile devices, consumer electronics and enterprise infrastructure
o 7 ARMv8-A processor licences signed, including lead licences for next generation designs
o 8 Mali multimedia processor licences signed, including first licences for video and display processors
· Growth in shipments of chips based on ARM processor technology
o 2.7 billion ARM-based chips shipped, up 11% year-on-year
o Shipment growth especially strong in enterprise networking and microcontrollers



Outlook
ARM enters the second half of the year with a healthy pipeline of opportunities that is expected to both underpin continued strong licence revenue and give rise to an increase in the level of backlog. Market data indicates improving semiconductor industry conditions, leading to the expectation of an acceleration in royalty revenue growth in H2 2014. Given these dynamics, we expect Group dollar revenues for full year 2014 to be in line with market expectations.

Investec note today:
"Headline PBT was in line and the outlook intact, but the mix shift between royalties and licences continues. Royalties were up just 2% due to inventory destocking (especially 3G phones in Asia), but licences grew 42%. We expect to lower our H214E royalty forecast, but expect this to be offset by upgrades to H214E licences. Royalty weakness is not ideal, but it should bounce back as the 4G cycle kicks in, with licence strength underpinning the mid-term outlook. We see current weakness as a Buying opportunity.
Q214 headlines. Group sales of $309.6m (INVe $304.8m, consensus $304.6m). PBT £94.2m (INVe £92m, cons £93.4m), EPS 5.4p (INVe 5.1p, cons 5.3p). PD royalties of $121.2m (INVe $131.2m, cons $129.4m) with 2% growth. 3G destocking in China slowed handset shipments. We expect to reduce our H214E pickup in royalties from c29% yoy growth to c15%. Once the 4G phone cycle takes hold, we expect a material increase in royalty growth, potentially impacting in Q414 for ARM. PD licencing revenues were very strong with 42% growth to $125.8m (INVe $109m, cons $109.8m) which offsets the royalty miss. Backlog pull-down was c60%, as normal, but was down 10% sequentially as some very large partner orders will only hit Q3, when management expect the backlog to move back up.
Investment view. The stock has been weak, but with i) no structural issues here (we see cyclical issues causing the royalty weakness), ii) royalty growth likely to pick up, plus iii) licence strength suggesting strong medium term royalties, we see current weakness as a buying opportunity. In cash adjusted forward PER terms, the stock is approaching its historic low of 25x. We retain our Buy, with our 1100p FY19E royalty-driven TP unchanged. Risks include macro-economic weakness and industry corrections."

July 22:

Credit Suisse: Outperform - TP: 1125p
Investec : Buy: - TP: 1100p
Finncap: Buy - TP: 1000p

Investec sees "buying opportunity" at ARM Holdings
22 July 2014 10:59

Recent weakness in the share price of ARM Holdings should be seen as a "buying opportunity", according to Investec after a better-than-expected second quarter from the chip designer.

The broker retained its 'buy' rating and 1,100p target price.

The tech group, which makes processors for smartphones and tablets, said pre-tax profit in the six months to June 30th rose 9% year-on-year to £94.2m, ahead of the £92m that Investec had pencilled in.

Revenues in dollar terms increased 17% to $309.6m, compared with Investec's $304.8m estimate, as a 42% jump in licensing offset no growth in royalties.

"We expect to lower our second-half royalty forecast, but expect this to be offset by upgrades to second-half licences," said Analyst Julian Yates.

"Royalty weakness is not ideal, but it should bounce back as the 4G cycle kicks in, with licence strength underpinning the mid-term outlook."

Yates said that the stock has been weak recently - down 24% so far this year and down 15% over the last three months as of Monday's close - but there are "no structural issues here".

ARM HOLDINGS BROKER VIEWS

Date Broker Recommendation Price Old target price New target price Notes
22 Jul Credit Suisse Outperform 877.00 1,125.00 1,125.00 Reiterates
22 Jul Investec Buy 877.00 1,100.00 1,100.00 Reiterates
22 Jul Finncap Buy 877.00 1,000.00 1,000.00 Reiterates

Good reasons to grab ARM Holdings
By Lee Wild | Tue, 22nd July 2014 - 12:04

Good reasons to grab ARM Holdings In a rollercoaster year, chip designer ARM Holdings (ARM) is currently on a dip. Its share price is down over a quarter so far in 2014 amid rising costs and dwindling growth in royalty revenue. But after a decent second-quarter, investors have chased the shares up 5% to 871p and there are good reasons why others should follow suit.
Revenue rose 17% in dollar terms during the three months ended June to almost $310 million (£181.59 million), and sterling sales climbed 9% to £187 million. Steady operating margin at 48.9% meant underlying pre-tax profit grew 9% to £94.2 million.

Licence revenue rocketed 42% during the quarter to almost $126 million, easily beating City forecasts. And a sequential drop in the order backlog is expected to reverse when big contracts come through during the third quarter.

Yet despite shipping 2.7 billion ARM processor-based chips - up 11% on last year - average royalty per chip fell from five cents to 4.6 cents. That's because sales of low-cost ARM-based microcontrollers and smartcards grew faster than more lucrative chips into smartphones and tablets. Electronics operators selling off older 3G handsets ahead of switching subsidies to 4G handsets also explains the meagre 2% increase in dollar processor royalties to $121.2 million.

However, the company still expects to outperform the overall semiconductor industry in the second half of 2014 "as more chips are sold to OEMs building more advanced devices, which typically utilise more ARM technology."

"The 41 processor licences signed in the second quarter were driven by demand for ARM technology in smart mobile devices, consumer electronics and embedded computing chips for the Internet of Things, and include further licences for ARMv8-A and Mali processor technology," says chief executive Simon Segars.

Analysts at Investec Securities expect to halve forecasts for second-half growth in royalty revenue to a more modest 15%, although there could be a surprise toward the end of the year "once the 4G phone cycle takes hold."

Strip out over £1 billion of net cash, worth 76p per share, and ARM shares trade on less than 28 times Investec's earnings per share forecasts for 2015 of 28.7p. That drops to less than 23 times for the year after, below the historic average. Persistent takeover rumours spice up the investment case.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

3rd Quarter Results

Progress on key growth drivers in Q3
· Growth in adoption of ARM® technology
o 43 processor licences signed across our target markets of mobile computing, enterprise infrastructure, and embedded intelligent devices
· Advanced technology enables a higher royalty percentage per chip in mobile devices, consumer electronics and enterprise infrastructure markets. In Q3, ARM maintained its licensing momentum for future royalty growth:
o 7 ARMv8-A processor licences signed, including three more licences for next generation designs
o 4 Mali™ multimedia processor licences signed, including another display processor license
o 5 POP IP licences signed including 4 for Cortex-A53 processors
· Growth in shipments of chips based on ARM processor technology
o 3 billion ARM-based chips shipped, up 19% year-on-year
o Strong growth in shipments of microcontrollers and enterprise infrastructure chips



Outlook
ARM enters the final quarter of 2014 with a robust opportunity pipeline that points to both strong licence revenues in Q4 and a sequential increase in order backlog. With market data underpinning the short-term outlook for royalty revenues, we expect group dollar revenues for the fourth quarter to be in-line with market expectations of about $350 million.

ARM ..ARM Holdings, broken out of downward trend channel. Really need to give it a further 24 hours for confirmation.

ARM Holdings broker views

Date Broker Recommendation Price Old target price New target price Notes
05 Dec Berenberg Buy 946.50 1,350.00 1,350.00 Reiterates
04 Dec Credit Suisse Outperform 946.50 1,000.00 1,000.00 Reiterates
03 Dec RBC Capital Markets Outperform 946.50 1,030.00 1,030.00 Retains
24 Nov Exane BNP Paribas Outperform 946.50 - 1,100.00 Reiterates
20 Nov Citigroup Neutral 946.50 850.00 850.00 Reiterates

From The Guardian Today......

Elsewhere chip designer Arm has added 27p to 957p after positive comments from Barclays analysts. In a note on rival Imagination Technologies, down 1p at 229p, Barclays said:

We think Imagination’s valuation is now intrinsically overly expensive (36 times/24times 2015/2016 PE for 30% compound annual growth rate, but also relative to peer Arm, whose growth drivers are more certain and which trades at only 28 times/22 times 2015/2016 PE for high 20s% compound annual growth rate. We therefore reiterate our underweight rating on Imagination and reiterate our overweight on Arm.

Meanwhile Andrew Dunn at RBC Capital Markets issued an upbeat note after talking to the company about China:

We hosted an investor call with Arm on the China smartphone market which highlighted the importance of this region (now the single largest smartphone market), the ability of the local ecosystem to deliver latest generation Arm technology at attractive price points, the transition to LTE (driving more advanced Arm intellectual property) and the rising uptake of higher royalty rate Arm v8 IP in smartphones.

We believe the application of advanced Arm IP into the high unit growth mid and entry level smartphone segments will both create a virtuous upgrade cycle and also raise Arm’s average smartphone royalty rate from around 1.5% to 3-4% by 2018.

Rising adoption of Arm’s more advanced IP (including v8) serves to raise royalty rates. An upgrade from a feature phone to a low end smartphone equals a 4 times royalty increase while ongoing innovation and the trickle-down over time of advanced technology from high end to mid and entry level segments should help offset standard industry chip average selling price declines and keep [prices] flat within each segment. In addition, Arm’s Mali graphics IP has a particularly high penetration rate in China due we believe to its broad offering (from high to low end) and compatibility with Arm’s processor IP. This allows Arm to benefit from an additional 1% royalty rate. With 10% CAGR unit smartphone growth over the next 5 years but growth weighted to the lower end, we expect rising royalty rates combined with flat ASPs to enable Arm to grow smartphone royalty revenues at a healthy 20%.