Soaring demand for semiconductors to power all manner of devices buoyed Arm (ARM) in the first quarter of 2016. Licensing sales climbed 11 per cent as the microchip designer signed 39 processor licences for applications such as mobile computing and automotive technology. Moreover, royalty revenues jumped 17 per cent as the group snatched market share and benefited from brisk sales of more advanced chips that command higher royalty rates. The upshot was a 14 per cent rise in pre-tax profits to £138m.
Overall shipments of Arm-based chips leapt a tenth to 4.1bn, but the group's backlog shrunk 5 per cent in the three-month period. Nonetheless, management expects full-year turnover to be in line with market expectations. Prior to the results, broker JP Morgan Cazenove expected EPS of 32.6p in 2016, rising to 38.02p in 2017 (30.23p in 2015).
