Marvell's Quarterly Profit Drops Sharply

Marvell Technology Group Ltd., under federal investigation over accounting practices and other issues, on Tuesday reported a sharp drop in profit for its fourth quarter and posted an $811 million annual loss.

The Silicon Valley chip maker last reported an annual loss in January 2008.

Marvell, which had previously said a patent-dispute settlement with Carnegie Mellon University would drag results for the year ended Jan. 30, on Tuesday said the $750 million was paid in the first quarter of the current year but recorded $655 million under operating expenses for the year.

Marvell had 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.

Its external accounting firm, PricewaterhouseCoopers LLP, resigned in October. In February, Marvell hired Deloitte & Touche LLP.

In April, it ousted the husband-and-wife team that had led the company for two decades and has since appointed new leadership.

The company is still searching for a chief financial officer and chief accounting officer.

Over all, Marvell reported fourth-quarter profit of $4.2 million, or a penny a share, down from $81.7 million, or 16 cents a share, a year earlier. Excluding stock-based compensation and other items, profit fell to 11 cents a share from 25 cents a year earlier.

Revenue fell 28% to $616.2 million.

Analysts surveyed by Thomson Reuters had projected 9 cents a share on $652.7 million.

Gross profit margin narrowed to 50.9% from 51.4% a year earlier.

Shares, up 12% this year, fell 0.6% to $9.79 in after-hours trading.

Write to Maria Armental at [e-mail]

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

July 19, 2016 18:35 ET (22:35 GMT)

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