Arm (LON:ARM), the FTSE 100 technology group whose chips power devices like the Apple iPhone, has delivered a strong set of second quarter results as demand for its products increased. Revenues leapt by 18% to £117.8 million and pre-tax profits gained 25% to £54.2 million in the three months to the end of June. That took the overall interim revenue figure to £233.9 million, up 22% year-on-year, and pre-tax profits to £104.9 million, up 29%.

ARM said it was seeing continued growth in the adoption by customers of its processor technology and had sold 29 processor licenses across a broad range of target markets in the second quarter. The company noted that it was seeing particular demand from mobile applications. In the three months, 1.1 billion ARM processor-based chips were shipped into mobile phones and tablet computers. Last week, shares in ARM jumped on news that US technology giant Apple had seen third quarter revenues surge on booming sales of devices like the iPhone and the iPad. Today, the shares were down by 11p to 605p. ARM added that growth was now moving in to consumer electronics and embedded products, where 0.8 billion of its processor-based chips were shipped in the period.

Warren East, ARM’s chief executive, said: “In the first half of 2011, we have seen strong license revenues driven by an increase in design activity around ARM technology across a broad range of end applications. Major semiconductor vendors and consumer electronics companies are making long-term commitments to using ARM technology in their future product developments, underpinning growth in ARM's long-term royalty revenues. As the addressable market for ARM technology grows, we continue to invest in the development of innovative technology, whilst simultaneously increasing revenues, profits and cash.”

ARM said it was entering the second half of 2011 with a healthy order backlog and a robust opportunity pipeline, which were expected to deliver strong performance in license revenues. It noted that relevant data for the second quarter, being the shipment period for ARM’s Q3 royalties, pointed to a small sequential increase in industry-wide revenues. Q4 royalties are harder to predict as continuing macroeconomic uncertainties may impact consumer confidence, it added. Nevertheless, overall group dollar revenues in the second half of 2011 are expected to be in line with current market expectations.

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