Chip designer Arm Holdings late Wednesday beat analyst estimates for its fiscal first quarter. But Arm stock fell in extended trading after its earnings outlook came up short.
The Cambridge, England-based company earned an adjusted 40 cents a share on sales of $939 million in the quarter ended June 30. Analysts polled by FactSet had expected Arm earnings of 34 cents a share on sales of $906 million. On a year-over-year basis, Arm earnings soared 67% while sales increased 39%.
For the current quarter, Arm forecast adjusted earnings of 25 cents a share on sales of $805 million. That's based on the midpoint of its outlook. Wall Street was modeling earnings of 27 cents a share on sales of $802 million for the fiscal second quarter. In the year-earlier period, Arm earned an adjusted 36 cents a share on sales of $806 million.
Arm left its fiscal 2025 guidance unchanged. It expects to earn an adjusted $1.55 a share on sales of $3.95 billion, based on the midpoint of its guidance. Analysts were targeting earnings of $1.57 a share on sales of $3.99 billion in fiscal 2025.
Arm Stock Falls After Report
In after-hours trading on the stock market today, Arm stock slid roughly 11.1% to 128.78. During the regular session Wednesday, Arm stock jumped 8.4% to close at 144.17 amid a semiconductor stock rally.
In a shareholder letter, Arm Chief Executive Rene Haas said the proliferation of AI technology across devices is driving increased use of Arm technology.
"As the energy needs of AI continue to escalate, so does the demand for the high-performance, power-efficient Arm compute platform," Haas said.
Arm stock is on the IBD Tech Leaders list.
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