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Marvell Technology's Stock Falls Post-Earnings Despite Meeting Expectations

Marvell Technology meets earnings but forecasts weak revenue, causing a 10.2% stock drop post-earnings report.

By Barry Stearns

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3/7, 17:37 EST
Marvell Technology, Inc.

Key Takeaway

  • Marvell Technology's stock fell 10.2% post-earnings despite meeting Q1 expectations, with EPS at 46 cents and revenue at $1.43 billion.
  • The company forecasts a lower-than-expected Q2 revenue midpoint of $1.15 billion versus analysts' $1.38 billion estimate.
  • Despite the weak outlook, Marvell's shares have surged 41% this year, outperforming the iShares Semiconductor ETF's 24% gain.

Earnings Report

Marvell Technology reported its earnings results for the January quarter, with adjusted earnings per share of 46 cents, in line with Wall Street analysts' expectations. The company's revenue stood at $1.43 billion, also aligning with analysts' estimates of $1.42 billion. Despite meeting earnings estimates, the stock experienced a 10.2% decline to $76.41 in post-market trading.

Financial Guidance

Marvell's financial outlook fell below Wall Street expectations, with a projected revenue range for the current quarter having a midpoint of $1.15 billion, significantly lower than the consensus estimate of $1.38 billion. CEO Matt Murphy acknowledged the soft demand affecting consumer, carrier infrastructure, and enterprise networking in the near term but expressed optimism for a recovery in the second half of the fiscal year.

Market Performance

Marvell's shares have seen a 41% increase this year, outperforming the iShares Semiconductor ETF, which tracks the ICE Semiconductor Index and has rallied by 24%. The company specializes in selling a range of chips and hardware products for the data center, 5G infrastructure, networking, and storage markets.

Management Quotes

  • Matt Murphy, CEO of Marvell Technology:

    "While we are forecasting soft demand impacting consumer, carrier infrastructure, and enterprise networking in the near term, we expect revenue declines in these end markets to be behind us after the first quarter, and project a recovery in the second half of the fiscal year."