Marvell Technology Q3 Results Top Estimates, Provides Rosy Outlook

(RTTNews) - Chipmaker Marvell Technology Group Ltd. (MRVL) reported Thursday a profit for the third quarter that increased from last year, despite lower margins, reflecting double-digit revenue growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings and revenue guidance for the fourth quarter, above Street view.

"Our results in the third quarter were above the high-end of our guidance mainly due to better demand from our mobile, wireless and storage customers," Chairman and CEO Dr. Sehat Sutardja said in a statement.

The Hamilton, Bermuda-based company reported net income of $103.16 million or $0.21 per share for the third quarter, higher than $68.82 million or $0.12 per share for the prior-year quarter.

Excluding items, adjusted net income for the quarter was $163.37 million or $0.32 per share, compared to $112.90 million or $0.20 per share in the year-ago quarter.

On average, 28 analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 19 percent to $931.23 million from $780.88 million in the same quarter last year, and topped twenty-seven Wall Street analysts' consensus estimate of $870.62 million.

Gross margin for the quarter contracted 190 basis points to 50.1 percent from last year's 52.0 percent. Total operating expenses for the quarter rose to $371.02 million from $339.58 million in the year-ago quarter.

Further, Marvell said it paid a quarterly dividend of $0.06 per share on October 3, 2013 to all shareholders of record as of September 12, 2013. Marvell intends to pay its next quarterly dividend of $0.06 per share on December 23, 2013 to all shareholders of record as of December 12, 2013, but developments in on-going litigation could delay the payment.

Looking ahead to the fourth quarter, the company forecasts adjusted earnings per share of $0.25 +/- $0.02, on projected revenues between $880 million and $920 million. Analysts currently expects the company to report earnings of $0.23 per share on quarterly revenues of $844.27 million.

"We continue to make excellent progress in our end markets with new innovative products and remain committed to delivering above industry revenue and profit growth as we head into next year," Sutardja added.

MRVL closed Thursday's regular trading session at $13.83, up $0.53 or 3.98% on a volume of 9.01 million shares. The stock gained a further $0.86 or 6.22% in after-hours trading.