Britain's ARM Holdings reported strong licensing of its chip designs in the third quarter, helping it beat market expectations and offset current weak demand in consumer electronic markets ahead of the holiday season.

The company, whose processor architecture powers Apple's iPad and new iPhone 4S, reported a 44 percent rise in pretax profit to 55.8 million pounds on revenue up 20 percent to 120.2 million pounds, both ahead of analysts' consensus. Earnings per share of 3.05 pence also delivered a beat.

Notwithstanding the below seasonal activity levels in the wider semiconductor industry, we expect that group dollar revenues for the full-year 2011 will be in line with current market expectations of around $763 million, the Cambridge-based company said on Tuesday.

ARM reports royalties a quarter in arrears, so it has less visibility on demand in consumer electronic markets than its chip-making partners such as Samsung and Texas Instruments.

The group, which recently unveiled its latest low-energy chip design, the Cortex-A7, said it signed 28 processor licenses in the quarter. [ID:nL5E7LJ42H]

It said it had a healthy opportunity pipeline for licensing and a historically high order backlog, which pointed to another strong quarter for license revenue in its fourth quarter.

Analysts expected ARM to post pretax profit of 51.1 million pounds on revenue of 116.5 million pounds, equating to earnings per share of 2.75 pence, according to a company-supplied consensus.

(Reporting by Paul Sandle)