Marvell Technology Swings to Profit

Marvell Technology Group Ltd. swung to a profit in the latest quarter, though revenue slid more than expected, and the company offered a mixed outlook for the current period.

The Silicon Valley chip maker anticipates third-quarter earnings of 8 cents to 13 cents a share, below analyst estimates for 14 cents, according to Thomson Reuters. Revenue is projected to come in flat to down 4%, better than analyst estimates for down 5%.

"We experienced a seasonally strong second quarter, driven by solid demand from customers across storage, networking, and wireless end markets," said Chief Executive Matt Murphy, who took the helm in June. "We are also beginning to see the benefits of improved focus on product cost as well as a more disciplined approach to spending, which resulted in better than expected earnings per share."

Marvell in June named Mr. Murphy, a Maxim Integrated veteran, its new chief executive, after ousting the husband-and-wife team that had led the chip maker for two decades in April.

Marvell has said an internal probe found accounting problems largely tied to when revenue was recognized, blaming what it called "tone at the top" issues, including management pressure to meet revenue targets. The company said it hadn't found evidence of fraud.

In all for the July quarter, Marvell reported profit of $51.3 million, or 10 cents a share, compared with a loss of $771.9 million, or a loss of $1.49 a share, a year earlier.

Excluding stock-based compensation and other items, adjusted profit rose to 18 cents a share from 7 cents a year earlier. Revenue decreased 12% to $626.4 million. Analysts surveyed by Thomson Reuters had projected adjusted profit of 11 cents a share on $630 million in revenue.

Gross margin grew to 54.1% from 35% a year earlier.

Shares slipped 1% premarket to $12.86.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

September 06, 2016 09:15 ET (13:15 GMT)

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