Chipmaker Marvell Technology Group Ltd. (MRVL) said Thursday after the markets closed that its third quarter profit surged from last year, helped by higher revenue, improved margins and a tax benefit. The company's quarterly earnings per share, excluding items, also breezed past Wall Street expectations as did its quarterly revenue.
The company reported GAAP net income for the third quarter of 201.6 million or $0.31 per share, compared to $70.9 million, or $0.11 per share for the year-ago quarter.
Apart from stock option expense, acquisition costs, restructuring chrges, the latest quarter include a $27.3 million benefit as a result of the expiration of the statute of limitations related to a tax contingency reserve. In addition, a $5.3 million income tax benefit was recorded relating to the adjustment of a prior year deferred tax asset.
Excluding items, non-GAAP net income for the third quarter was $231.8 million or $0.35 per share, compared to $145.3 million or $0.23 per share in the prior year quarter.
On average, 24 analysts polled by Thomson Reuters expected the company to earn $0.27 per share for the third quarter. Analysts' estimate typically exclude special items.
GAAP gross margin for the third quarter improved to 57.5% from 52.1% a year ago, while non-GAAP gross margin increased to 57.8% from 52.3% last year.
Net revenue for the third quarter increased 2% to $803.10 million from $791.05 million in the same quarter last year. Third quarter revenue grew 25% sequentially. Twenty-four analysts had a consensus revenue estimate of $770.00 million for the third quarter.
"We are very pleased with the revenue growth we experienced in the third quarter of fiscal 2010," said Dr. Sehat Sutardja, Marvell Chairman and Chief Executive Officer. "Our sequential revenue growth was better than our revised guidance provided on October 26, 2009, as order momentum improved across all our addressable end-markets.
In October, the company had raised its third quarter revenue guidance to a range of $760 million to $775 million from its earlier guidance of $680 million to $730 million.
For the first nine months of its fiscal year, the company reported GAAP net income of $148.6 million or $0.23 per share, compared to $212.3 million or $0.34 per share for the same period last year.
Non-GAAP net income for the nine-month period was $382.4 million or $0.59 per share, compared to $449.7 million or $0.71 per share in the prior year period.
Net revenue for the nine-month period fell to $1.97 billion from $2.44 billion in the corresponding year-ago period.
During a conference call, Marvell said it expects fourth quarter revenue of $820 million to $850 million, with non-GAAP earnings of $0.33 to $0.39 per share. Analysts currently expect the company to earn $0.27 per share on revenue of $779.57 million for the fourth quarter.
Among others in the industry, Analog Devices Inc. (ADI) last month reported a 27% drop in fourth quarter profit, hurt by shrinking margins and lower demand for its products. However, the company gave an upbeat first quarter earnings outlook.
In October, Texas Instruments Inc. (TXN) reported lower revenue and earnings for its third quarter, but forecast fourth quarter revenue and earnings above Wall Street expectations.
Marvell shares, which have traded in a range of $5.30 to $16.85 over the past year, closed Thursday's regular trading session at $16.53, unchanged from previous close. The stock is currently gaining 82 cents or 4.96% in after hours trading.
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