Revenues were six per cent ahead of our estimates and pre-tax profits were 14 per cent ahead. There was an easy compare (Thai floods hit chip production last year), but we see this as a good performance, albeit built into the shares. We maintain our “Hold” rating and 940p target.
DIDIER SCEMAMA BANK OF AMERICA MERRILL LYNCH
In terms of outlook the company highlighted record backlog (up five per cent sequentially) against our expectations of a decline. Adoption of ARM technology in new markets, as well as rising royalty rates, are supportive to the share price. We remain buyers with a 1,145p target.
SANDEEP DESHPANDE JP MORGAN CAZENOVE
Results were strong with better than expected performances in chip royalties. Recent share falls means the stock should benefit, but with the stock trading at 44 times earnings per share estimates, it is not one for the meek. We are neutral on the stock with an 869p target.