Business Weekly - Cambridge, UK

The Cambridge-based firm has confirmed its faith in the coming wave of ARM-employing phones with the announcement that it plans to double its dividend for 2007 from 1p to 2p and boost share buyback to £100m during the year.

ARM's upbeat outlook on 2007 comes despite what it called a “backdrop of softness in the semiconductor industry,” which along with a weak dollar, has led to a 13 per cent drop in profits for the first quarter.

ARM posted pre-tax profits of £21.6m, in line with market expectations but down from £24.7m a year earlier. Revenues were up marginally on last time it said, but below the £67.4m forecast at £66.5m, adding that its operating margin had risen from 29 to 30.3 percent this quarter.

“We are pleased that our first quarter results represent another quarter of robust operational execution and strong cash flow generation against a backdrop of some softness in the semiconductor industry,” said CEO, Warren East.

Investors have been impressed with the company's self-assurance however, with shares in ARM gaining over five per cent to 138.5p.