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Tablets, Smartphones Drive ARM Results (ARMH, AAPL, INTC)

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By Paul Ausick Published
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Chip designer ARM Holdings plc (NASDAQ: ARMH) posted revenues of $217.4 million for the company’s fourth quarter, handily beating the consensus estimate of $193.4 million. Adjusted net income also soared past expectations, coming in at $109 million versus a consensus estimate of $88.1 million.

The company licenses its designs to mobile device makers like Apple Inc. (NASDAQ: AAPL) as well as to companies that make chips for embedded applications. ARM is expected to face stiffer competition from Intel Corp. (NASDAQ: INTC) going forward, following Intel’s announcement of a new low-power chip.

ARM’s potential upside is about 18%, based on a consensus target price of $33.75 and a price this morning of $29.63. But its forward P/E ratio of nearly 50 indicates that there are high expectations for the stock — expectations that could be hard to meet given fresh competition from Intel.

Shares are up about 4% this morning at $29.63 in a 52-week range of $22.10-$32.18.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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