Wednesday, May 23, 2012

Marvell Earnings Announcement

Marvell released earnings Thursday, they reported non-GAAP EPS of 23 cents per share on revenues of $796.4 million. Street analysts were expecting EPS of 20 cents per share on revenues of $768.3 million. Marvell has also initiated a quarterly dividend of 6 cents per share, and they also are expanding their share buyback program by $500 million. Mobile and wireless end market revenue grew 14% from the year ago quarter but fell 1% from last quarter, this segment made up 29% of their total revenues. They saw an increase in their storage end market revenues of 20% from their last quarter release, resulting in a recovery from the flooding in Thailand. Gross and Operating margins dropped 4.3% and 6.7%, respectively. They still carry no long term debt and have a cash and cash equivalent balance of about $2.2 billion.
Marvell released guidance for next quarter with revenues in a range of $840-890 million, representing a sequential 6-12% increase. They also expect their mobile and wireless segment to grow between 5-10% during the next quarter, due in large part to an increase in TD smartphone revenue. Non-GAAP EPS estimates for next quarter are 28 cents per share. With the Chinese mobile market continuing to grow and China Mobile continuing their investments in the TD-SCDMA and TD-LTE networks, Marvell stands to benefit from this with a strong product line in both networks. Currently higher material costs and European exposure continue to hinder the stock lower despite a good earnings release and positive outlook.
- Ryan Ranado

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