Arm Holdings late Wednesday beat analyst estimates for the chip designer's fiscal third quarter but offered in-line guidance. Arm stock fell in extended trading.
The U.K.-based company earned an adjusted 39 cents a share on sales of $983 million in the quarter ended Dec. 31. Analysts polled by FactSet had expected Arm earnings of 34 cents a share on sales of $949 million. On a year-over-year basis, Arm earnings increased 34% while sales climbed 19%.
For the current quarter, Arm predicted adjusted earnings of 52 cents a share on sales of $1.23 billion, based on the midpoint of its outlook. Wall Street was modeling earnings of 52 cents a share on sales of $1.22 billion in the fiscal fourth quarter. In the year-earlier period, Arm earned 36 cents a share on sales of $928 million.
"With our high-performance, energy-efficient, flexible technology, Arm is a key enabler in advancing AI innovation and transforming the user experience, from the edge to the cloud," Chief Executive Rene Haas said in a shareholder letter.
Drivers of Arm's growth in the December quarter included adoption of the company's v9 architecture and early Compute Subsystems (CSS) shipments. Arm also got a boost from improved Internet of Things royalties and the latest custom silicon data center projects by its clients.
In after-hours trading on the stock market today, Arm stock dropped more than 5% to 163. During the regular session Wednesday, Arm stock popped 6.8% higher to close at 173.26.
Arm stock ranks fifth out of 39 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 96 out of 99.
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