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ARM 4Q profit doubles
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January 31, 2000: 11:00 a.m. ET
U.K. chip designer denies U.S. Crusoe project is a threat; shares leap
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LONDON (CNNfn) - U.K. semiconductor designer ARM Holdings said Monday its fourth-quarter earnings more than doubled, sending its shares sharply ahead as executives played down the threat of an emerging U.S. rival.
The company, which designs chips for devices such as cellular phones and video games, then licenses them to chip makers, said fourth-quarter pre-tax profits rose to 6.6 million pounds ($10.8 million) from 3 million a year earlier. Sales climbed 52 percent to 18.9 million pounds.
ARM (ARM) shares rose 6.5 percent to 3,595 pence Monday, helped by an upgraded stock recommendation from Morgan Stanley Dean Witter, which gave the share an "outperform" rating.
The buoyant fourth quarter helped full-year earnings jump 91 percent to 18 million pounds, as sales advanced 47 percent to 62.1 million. ARM clients last year shipped 131 million chips based on the company's designs, four times the previous year's number.
While ARM shares rose 13-fold last year to propel the stock into London's FTSE 100 index, they have come under pressure from the new Crusoe chip launched by Silicon Valley-based Transmeta Corp., a company backed by software guru Linus Torvalds. The stock has lost 14 percent since the start of the year, cutting its market value to 6.8 billion pounds.
However, ARM said it was targeting a different niche than the Crusoe chip, which has been feted for its low power consumption.
"We don't think Transmeta poses an immediate threat,'" ARM financial director Jonathan Brooks told Reuters. 
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