Apple's chip maker Arm's share price has dropped, despite upping its dividend by 25 per cent

 
Catherine Neilan
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Arm makes chips for Apple's iPhones (Source: Getty)
Apple's chip maker Arm Holdings's share price dipped this morning, despite upping its interim dividend 25 per cent after being buoyed by yet another strong quarter.

The figures:

Group revenues for the second quarter were up 15 per cent year-on-year in dollar terms, or 22 per cent in sterling.
Most of that came from processor royalty revenues, which were up 31 per cent, while licensing revenue climbed three per cent.
Pre-tax profit was even stronger, up 32 per cent year-on-year, while earnings per share climbed 34 per cent.
However, in early trading, Arm's share price was down 3.8 per cent.

Why it's interesting:

Arm had warned in April that data for the whole industry suggested there would be a “sequential decrease in industry-wide revenues” during the second quarter.
But it showed resilience during this quarter - and is even more upbeat about the rest of the year.
Among several deals this quarter, it has secured a record 54 processor licences “for a broad range of applications, from biometric sensors for mobile payments to automotive engine control” and secured a new subscription licence signed with a major Chinese original equipment manufacturer (OEM).
But there is also – of course: “strong year-on-year growth for chips going into mobile devices, enterprise infrastructure and embedded applications such as microcontrollers, smart sensors and secure smartcards”.

What they said:

Arm was pretty upbeat this morning, saying it was going into the second half of the year “with a robust pipeline of opportunities for licensing”.
Although it expects a “small sequential increase in industry revenues”, it said royalty revenues could grow faster than the overall industry due to increasing royalty per chip in mobile devices, and share gains beyond mobile.
“Assuming macroeconomic uncertainty does not further impact consumer spending we expect overall group dollar revenues for full year 2015 to be in-line with current market expectations.”
Simon Segars, chief executive, added: "The second quarter of 2015 has been a strong quarter for Arm with a highly diverse range of leading companies choosing to license Arm's latest processors and physical IP for their future product developments.
“Arm has been investing in advanced technology products for mobile devices, automotive applications and enterprise infrastructure, and in Q2 Arm signed licences for many of these new products. This licensing activity will help to grow the royalty revenue opportunity for years to come.”

In short:

Investors appear as unimpressed by Arm as they were by Apple last night.

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