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ARC narrows losses
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May 2, 2001: 3:57 a.m. ET
UK chip designer reduces losses, boosts revenue from licensing agreements
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LONDON (CNN) - UK chip designer ARC on Wednesday reported narrowing first-quarter losses and increased revenue as it grew its licensee and customer base.
ARC posted a net loss of £4.4 million ($6 million) before tax in the three months to March 31, which was 6.5 percent less than the fourth-quarter 2000 loss of £4.7 million.
The company said revenue rose 5 percent compared with the previous quarter to £3.7 million and added that it still had £140 million in cash to fuel the business.
Larger rival ARM Holdings, Europe's No. 1 designer of microprocessors,
Last month posted a 39 percent rise in first-quarter pretax profit, also bolstered by licensing revenue.
Chip designers are escaping the worst of the slowdown in demand from computer makers and mobile phone companies as their businesses tie up future income from licences.
In its earnings statement, ARC announced new licence agreements with NeuriCam and Vaishali Semiconductor, bringing to six the number of such deals tied up in the quarter, the company said. ARC's licensees also includes companies such as IBM and Texas Instruments.
ARC's licensing income rose 13 percent in the first three months to $3 million, accounting for the bulk of the company's revenue.
One of Arc's main designs is Tangent, an application-specific processor, or ASP, which can be customised for use in a wide variety of products, including telecommunications, voice and data networking and consumer electronic goods.
"We remain confident about our prospects for the remainder of the year," said Chief Executive Bob Terwilliger in announcing the earnings. "We now have 50 customers with 80 design licences and our technology is being used successfully in an ever-expanding range of products."
Arc (ARK) shares rose 1.8 percent on London to 113 pence after the results were announced. 
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