Marvell Technology Earnings: Exceeds Street Estimates

Marvell Technology Group Ltd. (NASDAQ:MRVL) posted a decrease in profit as revenue declined. Marvell Technology Group is a global semiconductor provider of analog, mixed-signal, digital signal processing, and embedded microprocessor integrated circuits.

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Marvell Technology Group Earnings Cheat Sheet for the Third Quarter

Results: Net income for Marvell Technology Group Ltd. fell to $68.8 million (12 cents per share) vs. $195.1 million (32 cents per share) a year earlier. This is a decline of 64.7% from the year-earlier quarter.

Revenue: Fell 17.8% to $780.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Marvell Technology Group Ltd. reported adjusted net income of 20 cents per share. By that measure, the company beat the mean estimate of 15 cents per share. Analysts were expecting revenue of $768.7 million.

Quoting Management: “Our results in the third quarter were affected primarily by the slowdown in PC demand. Despite the near-term softness in PCs, we are focused on growing our overall storage business through share gains in HDDs and growth in SSDs,” said Dr. Sehat Sutardja, Marvell’s Chairman and Chief Executive Officer. “We remain confident in our investments and multiple long-term growth opportunities. We also remain committed to returning cash to our shareholders through our share repurchase and dividend programs.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 4.6 percentage points from the year-earlier quarter to 52%. In that span, margins have contracted an average of 4.2 percentage points per quarter on a year-over-year basis.

Revenue has dropped for four quarters in a row. Revenue declined 9.1% to $816.1 million in the second quarter. The figure fell 0.8% in the first quarter from the year earlier and dropped 17.5% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 19 cents versus a mean estimate of net income of 22 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 27 cents per share to 15 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 67 cents per share, the average estimate for the fiscal year has fallen from 92 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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