SANTA CLARA (dpa-AFX) - Chipmaker Marvell Technology Group Ltd. (MRVL) said Thursday after the markets closed that its first quarter profit fell 44% from last year, hurt by lower revenue and higher operating expenses.
However, the company's quarterly earnings per share, excluding items, handily beat analysts' estimates as did its quarterly revenue. At the same time, the company issued an upbeat outlook for the second quarter.
'Our results in the first quarter were at the high-end of our guidance mainly due to better than normal seasonal demand and share gains in our storage and networking end markets,' said Dr. Sehat Sutardja, Marvell's Chairman and Chief Executive Officer.
'Starting in the second quarter of fiscal 2014, we expect many of our investments and key initiatives across all of our end markets to produce tangible results. More specifically, we expect growth to be driven by increased traction in areas such as mobile handsets, tablets, connectivity and SSDs,' Sutardja added.
Marvell shares are currently gaining 6.10% in after hours trading after closing the day's regular trading session at $11.31, down 5 cents. The shares trade in a 52-week range of $6.98 to $13.27.
Marvell makes chips for mobile phones and for storage devices. Marvell's storage business, which makes chips for hard disk and solid state drives, has been negatively impacted by slowing demand for desktops and notebooks, as customers switch to post-PC products like tablets and smartphones.
Marvell's wireless business, which makes broadband & wireless transceivers used in phones, is also facing problems due to its struggling customer Research in Motion and on competition from smaller rivals.
For the first quarter ended May 4, the company reported net income of $53.2 million or $0.11 per share, compared to $94.5 million or $0.16 per share for the year-ago quarter.
Excluding items, adjusted net income for the first quarter was $98.1 million or $0.19 per share, compared to $138.7 million or $0.23 per share in the prior year quarter.
On average, 29 analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the first quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved to 54.3% from 54.0% a year ago, while adjusted gross margin increased to 54.6% from 54.5% last year.
Total operating expenses for the quarter rose 6% to $356.1 million from $336.1 million a year earlier.
Net revenue for the first quarter fell 8% to $734.37 million from $796.35 million in the same quarter last year. Twenty-nine analysts had a consensus revenue estimate of $721.55 million for the first quarter.
Marvell repurchased about 20 million shares of its common stock for a total of $200 million duringn the first quarter.
Looking forward to the second quarter, the company forecast revenue of of $770 million to $810 million, earnings of $0.09 per share, plus or minus $0.02 per share, and adjusted earnings of $0.19 per share, plus or minus $0.02 per share. Analysts currently expect the company to earn $0.18 per share on revenue of $763.48 million for the second quarter.
Copyright RTT News/dpa-AFX
© 2013 AFX News
