Chip maker Marvell Technology Group Ltd. (MRVL: Quote), Thursday reported a profit for the second quarter that plunged by more than half, as economic worries impacted storage and mobile-end markets, and margins took a beating. Marvell's earnings for the quarter missed Street estimates and sales were way short of expectations.
The news dragged down shares of Marvell by about 7.0 percent in after-hours trade on the Nasdaq.
Marvell makes semiconductor chips used mainly in hard drives and communication applications such as network routers and smartphones. However, pallid market conditions impacted quarterly sales that slid 9 percent year-over-year.
CEO Sehat Sutardja said, "Our results in the second quarter were affected primarily by the slowdown in the macro-economic environment that impacted our storage and mobile end markets..."
The company joins a host of chip makers who have reported lackluster results on account of varying factors such as economic volatility, supply chain disruptions, and weak channel sales in China. Last month, bigger rival Texas Instruments Inc. (TXN) reported a 34 percent drop in quarterly profit.
Hamilton, Bermuda-based Marvell reported second quarter net income of $93 million or $0.16 per share, sharply down from $192 million or $0.31 per share last year.
Excluding items, adjusted earnings for the quarter totaled $142 million or $0.24 per share, compared to $234 million or $0.38 per share a year ago.
On average, 31 analysts polled by Thomson Reuters expected earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter slipped to $816 million from $898 million in the prior year. Analysts had a consensus revenue estimate of $852.71 million for the quarter.
Gross margin for the quarter dropped to 53.2 percent from 57.9 percent last year. Operating expenses were higher at $344 million, compared to about $325 million a year ago, reflecting increased spend on research and development.
During the quarter, Marvell repurchased about 20 million of its shares for a total of $250 million.
Marvell, which paid its first quarterly technology-group-ltd.aspx'>dividend in July 2012, said it will pay its next quarterly dividend of $0.06 per share on October 4 to all shareholders of record as of September 13.
MRVL closed Thursday at $12.28, up 2.85%, on a volume of 14.7 million shares on the Nasdaq. In after hours, the stock dropped $0.85 or 6.92%. In the past year, the stock has traded in a range of $10.27 - $16.86.
| || |
| To receive FREE breaking news email alerts for Marvell Technology Group Ltd. and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com