Marvell profit tops Street forecast
SAN FRANCISCO (Reuters) - Diversified U.S. chipmaker Marvell Technology Group Ltd (MRVL.O) on Tuesday reported a profit that topped Wall Street's forecast and issued a fresh outlook, sending its shares up 10 percent after the closing bell."
Citing weak demand and the worsening economy, Marvell slashed its outlook last month. Chief Executive Sehat Sutardja said the company was still confronting a fearful economic environment.
"While a portion of the turmoil seen in the semiconductor supply chain is real demand erosion, we also believe a certain amount could be due to overreaction" Sutardja said during a conference call with analysts.
He also vowed to take advantage of the downturn. "There are a lot of market opportunities that we have not played today."
Needham & Co analyst Quinn Bolton said the results were a relief to some.
"I think people were fearing worse. You've seen a lot of their peers in the semiconductor industry come out with some bad pre-announcements," Bolton said.
He noted that the company saw much less order volatility in November than in October, which was a positive sign.
Marvell said its net earnings in the fiscal third-quarter ended November 1 came in at $70.9 million, or 11 cents per share, versus a year-ago net loss of $6.4 million, or a penny per share.
Excluding stock-based compensation and other items, the company earned $145.3 million, or 23 cents a share, beating the average analyst estimate of 20 cents a share, according to Reuters Estimates.
Revenue climbed 4 percent to $791 million, versus the average analyst estimate of $787.3 million, according to Reuters Estimates.
For the January quarter, the company forecast adjusted earnings of 14 cents to 20 cents a share, versus the average analyst estimate, which ranged from 14 cents to 18 cents a share.
The company saw fiscal fourth-quarter revenue falling 14 to 19 percent year-over-year to $690 million to $730 million. That compares with Wall Street's forecasted range of $697 million to $740 million.
WEATHERING THE DOWNTURN
Marvell, which is incorporated in Bermuda but has its headquarters in Santa Clara, California, supplies a wide array of semiconductor components, including chips for Apple Inc's (AAPL.O) iPhone and Research in Motion Ltd (RIM.TO)'s BlackBerry.
The company has been warning of deteriorating demand as economies around the world slip into recession, and it is vowing to weather the downturn by controlling expenses while investing strategically in new growth markets. Continued...
