U.K. Chip Designer ARM Effortlessly Beats Forecasts

LONDON -- Chip designer ARM Holdings (ARMHY Quote) delivered third-quarter results this morning that comfortably exceeded expecations.

The company, which dominates the market for mobile-phone chips, posted third-quarter, pretax profit of 8.8 million and sales of 26.4 million. This topped analysts' expecations for profit of about 7 million and sales in line with the second-quarter result of about 23 million. The positive results were boosted by higher royalty revenue, and the company said the outlook for the rest of the year remains "strong."

Despite increasing competition, ARM dominates the market for third-generation mobile phones, which will offer data as well as voice services. In the 3G arena, there is a huge battle among Microsoft (MSFT Quote), Palm (PALM Quote) and a consortium called Symbian -- made up of Nokia (NOK Quote), Ericsson (ERICY Quote), Motorola (MOT Quote), Matsushita(MC Quote) and Psion to establish their operating system as the standard for these new mobile phones. Regardless of who wins, ARM has the intellectual rights to the chip that will power these devices. ...