Chipmaker Marvell Technology late Thursday matched Wall Street's earnings target for its fiscal fourth quarter on slightly higher than expected revenue. But its guidance for the current period was well below estimates. Marvell stock fell in extended trading.
The Santa Clara, Calif.-based company earned an adjusted 46 cents a share on sales of $1.43 billion in the quarter ended Feb. 3. Analysts polled by FactSet had expected earnings of 46 cents a share on sales of $1.42 billion. On a year-over-year basis, Marvell's earnings were flat while sales increased 1%.
Heading into the report, Marvell's sales had declined for three straight quarters on a year-over-year basis. Its earnings had fallen for four consecutive quarters.
For the current quarter, Marvell predicted adjusted earnings of 23 cents a share on sales of $1.15 billion. Wall Street had been modeling earnings of 41 cents a share on sales of $1.38 billion for the fiscal first quarter. In the same quarter last year, Marvell earned an adjusted 31 cents a share on sales of $1.32 billion.
Marvell Stock Drops After Report
"While we are forecasting soft demand impacting consumer, carrier infrastructure, and enterprise networking in the near term, we expect revenue declines in these end markets to be behind us after the first quarter, and project a recovery in the second half of the fiscal year," Chief Executive Matt Murphy said in a news release.
Marvell makes networking and data storage chips used in cloud computing, automotive, communications and other applications.
In after-hours trading on the stock market today, Marvell stock tumbled more than 5% to 80.51. During the regular session, Marvell stock rose 4.6% to close at 85.09.
AI Chip Business Is Strong: CEO
Marvell cited artificial intelligence as a growth driver for its fourth quarter and the current quarter.
"AI drove strong growth in our data center end-market revenue, which increased 38% sequentially and 54% year over year," Murphy said. "As a critical enabler of accelerated infrastructure for AI, Marvell is well positioned to capitalize on this massive technology inflection, which continues to gain momentum."
He added, "In the first quarter of fiscal 2025, we expect continued sequential growth in our data center revenue with initial shipments of our cloud-optimized silicon programs for AI complementing our electro-optics franchise."
On March 1, Marvell stock broke out of a flat base at a buy point of 73.53, according to IBD MarketSurge charts.
Further, Marvell is on the IBD Tech Leaders stock list.
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