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ARM's Q4 profits beat expectations

British semiconductor firm ARM has reported strong fourth quarter earnings that exceeded expectations.

The Cambridge-based company enjoyed a 16 per cent rise in pre-tax profit for the period, no doubt benefitting from its chip designs featuring in the majority of smartphones and tablets shipped over the holiday period.

ARM recorded overall pre-tax profit of £80 million on revenue of £164 million, which equates to earnings of 4.08p per share.

Analysts had underestimated the firm’s fourth quarter performance, having expected a pre-tax profit of £75.6 million on revenue of £152.2 million.

"ARM has seen good revenue and earnings growth throughout 2012," said ARM CEO Warren East. "Customers are developing products to meet the needs of the post PC era and are driving demand for ARM's most advanced technology.

"In Q4 we again saw influential market-leaders demonstrating their commitment to ARM technology by licensing our latest products. Royalty revenue has also grown strongly during Q4 underpinned by ARM's market share gains and an increased royalty percentage from Cortex-A class processors being deployed into smartphones and tablets," East added.