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Marvell Technology's Sales Got a Lift From 5G. Its Outlook Was Mixed, – Barron's

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Marvell Technology's Sales Got a Lift From 5G. Its Outlook Was Mixed, - Barron's

The global chip shortage has raised expectations for semiconductor companies.


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Marvell Technology

Group reported revenue that topped Wall Street expectations, and adjusted profit that was in line with analysts’ models, but its forecasts for the current quarter raised concerns its next results may not be a strong as hoped.

There is a global shortage of semiconductors, so investors have had lofty expectations for chip companies. They expect results that are comfortably above what Wall Street had penciled in, and forecasts pointing to a bullish outlook.

But the low end of the ranges Marvell forecast for its fiscal first-quarter earnings and revenue were below the consensus views on the Street. Marvell (ticker: MRVL) shares fell more than 3% during the extended session Wednesday.

The infrastructure-chip maker reported fiscal fourth-quarter net income of $16.5 million, which amounts to 2 cents a share, compared with a profit of $1.77 billion, or $2.62 a share, in the year-ago period. Adjusted for stock compensation and amortization of intangible assets, among other things, earnings were 29 cents a share, compared with 17 cents a share a year ago. Fourth-quarter revenue rose 11% to $797.8 million.

Analysts had expected adjusted earnings of 29 cents a share and sales of $786.1 million.

Marvell CEO
Matt Murphy
said that the company’s performance was driven by the company’s networking business, which grew 22% because of strong buying related to 5G and cloud computing.

Marvell’s year-ago fourth-quarter results included a pretax gain of $1.1 billion, resulting from the sale of its Wi-Fi business to

NXP Semiconductors

(NXPI) for $1.76 billion in cash, along other things.

The company said it expected fiscal first-quarter adjusted earnings of 23 cents to 31 cents a share, and sales of $800 million, plus or minus 5%. Marvell noted that it had temporarily widened its revenue guidance range because of uncertainty related to the Covid-19 pandemic.

The first quarter consensus call for per-share adjusted earnings was 27 cents a share, on sales of $786.1 million.

Marvell stock has more than doubled in the past year, as the PHLX Semiconductor index advanced 83%. Marvell shares closed the regular session off 4.8% to $45.56.

Write to Max A. Cherney at max.cherney@barrons.com

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