By Arsheeya Bajwa and Stephen Nellis

(Reuters) -Shares in Arm Holdings fell 11% on Wednesday after the chip provider gave a fiscal first-quarter forecast below Wall Street estimates and declined to give guidance for the full year, citing global trade and economic uncertainty.

Arm's fourth-quarter revenue slightly beat analysts' estimates, but it joined companies across the board in providing a cautious quarterly forecast. Sweeping global tariffs announced by U.S. President Donald Trump and tighter U.S. curbs on the export of advanced semiconductors to key chip market China have clouded the outlook for semiconductor firms.

"Given the uncertainty of the global trade and economic picture, we have lower visibility than is traditional to start the year. As a result, we do not consider it prudent to issue full-year guidance," Chief Financial Officer Jason Child told analysts during a conference call.

Arm's commentary follows similar warnings from other chipmakers including Samsung and Qualcomm.

The company has given annual sales guidance in past years but CEO Rene Haas said Arm's increasing share of revenue from per-chip royalty payments, which are in turn tied to sales of devices such as smartphones and laptops, has made its business harder to predict.

The company forecast first-quarter revenue of $1.00 billion to $1.10 billion, with a midpoint below analysts' average estimate of $1.10 billion. Arm expects adjusted profit of 30 to 38 cents per share for the first quarter, compared with estimates of 42 cents per share.

Haas told Reuters the below-expectations guidance is due to a large licensing deal that may not close during the fiscal first quarter. Royalty revenue growth will be between 25% and 30% in the fiscal first quarter, higher than in the previous quarter, he said.

"Why are we guiding slightly below consensus - it's really down to licensing," Haas said. "We just want to be prudent relative to some large deals that we have visibility on."

Haas said tariffs have had little impact on Arm's business so far.

"We don't really know what that's going to look like today. It's not a big impact, because 10% to 15% of our shipments end up in the U.S.," Haas said.

Arm's chip technology powers nearly every smartphone in the world, and the UK-based company has attempted to make inroads in data centers and other markets.

Shifting trade policies are likely to hurt consumer demand, bringing on a possible decline in the smartphone market this year, according to research firm Counterpoint.

Global smartphone shipments rose 1.5% in the calendar first quarter, with Apple , a major Arm customer, front-loading supply to sidestep potential tariffs, data from research firm International Data Corporation showed. The growth rate had been 7.8% for the same period in 2024.

Revenue in Arm's royalties segment jumped 30% in the fiscal fourth quarter as higher-end smartphone chips use the company's latest technology, Haas said.

However, if consumers become spooked this year and gravitate toward entry-level smartphones, those devices likely will not use Arm's latest offerings, said Ben Bajarin, head of technology consultancy Creative Strategies.

The company reported fourth-quarter sales of $1.24 billion, slightly above estimates. Adjusted profit of 55 cents per share in that period beat estimates for a profit of 52 cents per share.

The company's chip architecture competes against Intel and AMD's longstanding x86 stronghold in the server central processor market- a booming area in the AI market where central processing units are used alongside advanced graphics processors in modern data centers. 

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Richard Chang and Nia Williams)