UPDATE 2-Marvell net loss narrower than expected; to cut jobs
SAN FRANCISCO Nov 27 (Reuters) - Diversified chip maker Marvell Technology Group Ltd (MRVL.O) reported a narrower-than expected quarterly net loss on Tuesday compared with a small year-ago profit, amid higher research and development costs. The company said it planned to cut operating costs to help meet financial targets by eliminating about 400 jobs, or 7 percent of its workforce.
The job cuts will be worldwide, but focus on the United States and Israel, and are expected to be completed in the current quarter, the company said.
Investors have been clamoring for Marvell to implement a restructuring plan to reduce costs.
The company's spending on research and development grew 65 percent to $252 million in the latest quarter.
Santa Clara, California-based Marvell posted a net loss for the third quarter ended Oct. 27 of $6.4 million, or 1 cent per diluted share, compared with a net profit of $6.0 million, or 1 cent per diluted share, in the quarter ended Oct. 28, 2006. Revenue rose 46 percent to $758.25 million, topping forecasts.
Excluding one-time items, Marvell reported a profit of 14 cents per share compared with a profit of 12 cents, excluding items, in the year-earlier quarter.
Analysts, on average, had forecast a loss of 6 cents per share, according to Reuters Estimates. Excluding one-time items, the consensus forecast was a profit of 8 cents a share.
Revenue was expected by analysts to average $711.3 million, according to Reuters Estimates. Forecasts varied between $708.0 million or $727.0 million.
In August, Marvell had forecast third-quarter revenue of $710 million. It had then forecast a gross margin of 48 percent. On Tuesday, it reported a net gross margin of 48.3 percent.
Marvell said it expects to take a restructuring charge during its fiscal fourth quarter ending in January of up to $8 million to cover employee severance and other expenses.
(Reporting Eric Auchard in San Francisco; Editing by Carol Bishopric, Toni Reinhold)
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