Chipmaker Marvell Technology Group Ltd. (MRVL) Thursday said its second quarter profit declined from last year, hurt by lower revenue amid the difficult economic conditions. The company's quarterly adjusted earnings, however, exceeded analysts' expectations, as did quarterly revenue. Marvell posted a 23% revenue growth sequentially, reflecting an improving economy and the acceptance of new and existing products. Marvell shares gained over 8% in after hours trading following the announcement of results.
The Hamilton, Bermuda-based company reported GAAP net income of $58.5 million or $0.09 per share for the second quarter, down from $71.4 million or $0.11 per share in the prior year quarter.
Excluding items, non-GAAP net income dropped to $118.7 million or $0.18 per share from $154.0 million or $0.24 per share in the year-ago quarter. On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the second quarter.
Second quarter net revenue declined 24% to $640.6 million from $842.6 million in the same quarter last year. Twenty-six analysts had a consensus revenue estimate of $619.83 million for the second quarter.
Earlier, the company raised its revenue estimate to range between $600 million and $630 million for the second quarter, citing the broad improvement in demand within multiple end-markets.
However, Marvell reported a 23% revenue growth from $521.4 million in the last quarter. The company said, "Our sequential revenue growth reflects both an improving economy and the acceptance by customers of our new and existing products."
As a percentage of revenue, gross margin improved to 55.0% from 51.8% in the previous year quarter. Non-GAAP gross margin rose to 55.3% from 52.3% in the second quarter of fiscal 2009.
Total operating expenses for the quarter eased to $285.0 million from $373.1 million in the prior year quarter.
During the quarter, Marvell agreed to pay $72 million to resolve a shareholder class action lawsuit filed on August 16, 2007 related to Marvell's historic stock option granting practices. Adjusting for the settlement, the company has restated its GAAP net loss for the first quarter of fiscal 2010.
For the first-half of fiscal 2010, Marvell posted a net loss of $53.0 million or $0.09 per share, compared to net income of $141.3 million or $0.22 per share in the year-ago period.
On a non-GAAP basis, net income was $150.6 million or $0.23 per share, compared to $304.4 million or $0.48 per share in the prior year period.
Net revenue for the year-to-date period declined to $1.2 billion from $1.6 billion in the previous year period.
Among others in the industry, Geneva, Switzerland-based STMicroelectronics NV (STM), Tuesday reported a wider net loss for the second quarter, hurt by lower revenues on weaker demand as a result of the prevailing economic conditions. The company also provided its third quarter forecast, with revenue expected to come in ahead of Street expectations.
Dallas, Texas-based Texas Instruments Inc. (TXN) reported second quarter earnings that fell 56% from last year, hurt by lower revenue and gross margins. The company also forecast third quarter earnings above analysts' current consensus estimate.
Marvell closed Thursdays' regular trading session at $14.63, up 23 cents or 1.60%, on a volume 19.80 million shares. In after-hours, the share further gained $1.09 or 7.45%.
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