Arm Holdings late Wednesday beat analyst estimates for the chip designer's fiscal second quarter and with its outlook for the current quarter. But Arm stock fell in extended trading after the company stuck with its prior full-year guidance.
The Cambridge, England-based company earned an adjusted 30 cents a share on sales of $844 million in the quarter ended Sept. 30. Analysts polled by FactSet had expected earnings of 26 cents a share on sales of $810 million. In the year-earlier period, Arm earned an adjusted 36 cents a share on sales of $806 million.
For the current quarter, Arm predicted adjusted earnings of 34 cents a share on sales of $945 million, based on the midpoint of its outlook. Wall Street was modeling earnings of 33 cents a share on sales of $939 million in the fiscal third quarter.
In the same quarter last year, Arm earned an adjusted 29 cents a share on sales of $824 million.
Despite the beat-and-raise report, Arm kept is full fiscal-year outlook unchanged. It still expects to earn an adjusted $1.45 to $1.65 a share on sales of $3.8 billion to $4.1 billion. The midpoints of $1.55 in earnings per share and $3.95 billion in sales are slightly below consensus estimates. Analysts were looking for earnings of $1.56 a share on sales of $3.97 billion in fiscal 2025.
"Demand for our high-performance Arm v9 and CSS compute platforms continues to exceed expectations, and to accelerate our licensing and royalty revenue growth," Chief Executive Rene Haas said in a written statement. "AI everywhere is generating new opportunities for the Arm compute platform from the cloud to the edge."
Arm Stock Sinks After Report
In after-hours trading on the stock market today, Arm stock fell more than 5% to 137. During the regular session Wednesday, Arm stock rose 2.9% to close at 144.68.
Arm stock is on the IBD Tech Leaders list.
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