A cautious forecast for the current quarter confused investors, ARM shares fell in price by 5 %

The British Holding ARM, which is developing the processor architectures of the same name, this week reported on the results of the third fiscal quarter, which were generally inspiring, but caution in predicting the dynamics of the revenue for the current quarter and fiscal year generally provoked a fall in the issuer’s shares for 5–6 %.

Image Source: Arm

The CEO of ARM RENE Haas, as Bloomberg notes, announced the presence of serious supporting business factors, but noted the need to be careful in forecasts, since the holding is only six quarters as a public company, and in this sense it is necessary to adequately assign targeted guidelines.

In the last quarter, ARM total revenue in an annual comparison increased by 19 % to $ 983 million, surpassing analysts ($ 945 million). The specific income per share at the rate of 39 cents also turned out to be higher than the expectations of investors (34 cents). In the current quarter, ARM expects to help from $ 1.18 to $ 1.28 billion, which is slightly higher than the market ($ 1.22 billion) in the center of the range ($ 1.23 billion). The revenue forecast for the entire fiscal year ARM, as it approached the end of the period (Marta), narrowed to the range from $ 3.94 to $ 4.04 billion. Earlier, borders were indicated as $ 3.8 and $ 4.1 billion, respectively. Investors accepted this news negatively, but the head of the company explained that such a clarification is always characteristic as it approaches the end of the reporting period, since the statistics for the previous months have already been formed and the picture as a whole becomes more clearly for the year. Some investors were counting on the correction of the proceeding forecast towards a unambiguous increase.

Rene Haas also emphasized that the participation of ARM in the implementation of the ambitious Stargate project for the development of computing infrastructure for artificial intelligence systems in the United States emphasizes the importance of the company in this area. ARM acts as a technological partner in Stargate, although not one of the largest suppliers of the X86-compatible processors in the project is involved.

The revenue of ARM from licensing deductions in the last quarter reached $ 403 million, the royalties brought $ 580 million, both indicators exceeded the market expectations. Although the company can acquire new licenses and increase fees from existing customers, with the largest of them in the person of Qualcomm, it is involved in court disputes, which presents a certain risk for the further dynamics of revenue.