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Marvell (MRVL) Q3 Earnings Meet Estimates, Increase Y/Y

Zacks Equity Research
·3 min read

Marvell Technology Group MRVL delivered third-quarter fiscal 2021 non-GAAP earnings of 25 cents, in line with the Zacks Consensus Estimate. Moreover, the reported figure jumped 47% from the year-ago quarter’s adjusted earnings of 17 cents per share.

Marvell’s revenues of $750.1 million almost came in line with the consensus mark of $750.4 million. In addition, the revenue figure increased 13.2% year over year. Solid demand for its networking products from the data-center and 5G infrastructure end markets aided the company’s performance during the reported quarter.

Despite stellar year-over-year growth in the top and bottom lines, shares of the company fell 6% during Wednesday’s extended trading session as it warned that the industry-wide supply constraints are preventing it from meeting all demand for its semiconductor products.

Marvell Technology Group Ltd. Price, Consensus and EPS Surprise

Marvell Technology Group Ltd. price-consensus-eps-surprise-chart | Marvell Technology Group Ltd. Quote

Quarter Details

In the end markets, storage revenues (37% of total revenues) fell 4% year over year to $276 million.

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The networking business (59%) revenues climbed 35% year on year to $445 million.

Other product revenues (4%) during the fiscal second quarter plunged 35% on a year-over-year basis to $29 million.

Marvell’s non-GAAP gross margin contracted 50 basis points (bps) to 63%. Non-GAAP operating expenses edged down 1.2% year over year to $280 million. Non-GAAP operating margin expanded 490 bps year on year to 25.7%.

Marvell exited the reported quarter with cash and cash equivalents of $832 million compared with the previous quarter’s $831.5 million. The company’s long-term debt totaled $992.8 million.

The firm generated cash from operating activities of $257.5 million during the fiscal third quarter and $659 million in the first nine months of fiscal 2021. During the quarter, Marvell returned $40.2 million to shareholders through dividend payments. In the first three quarters of the fiscal year, it repurchased shares worth $25.2 million and paid $120.1 million in dividend.

Guidance

Marvell's guidance for the fourth quarter of fiscal 2021 takes into account the U.S. government's export restriction on certain Chinese customers. The company has temporarily widened the guided range for revenues due to the uncertainties associated with the coronavirus crisis.

The company projects fourth-quarter fiscal revenues of $785 million (up or down up to 5%). The Zacks Consensus Estimate for revenues is pegged at $786.2 million, suggesting growth of 9.6% from the year-ago quarter.

Non-GAAP earnings per share are expected between 25 cents and 33 cents. The consensus mark of 28 cents indicates a 64.7% year-over-year surge.

Zacks Rank & Stocks to Consider

Marvell currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include NVIDIA Corporation NVDA, Arrow Electronics ARW and Texas Instruments TXN, all carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for NVIDIA, Arrow and Texas is currently pegged at 18.3%, 9.8% and 9.3%, respectively.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
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