SAN FRANCISCO (AP) ? Shares of Marvell Technology Group Ltd. climbed Friday after the chip designer reported second-quarter results ahead of analyst expectations.
THE SPARK: Late Thursday, Marvell said its second-quarter net income fell 13 percent as sales remained basically unchanged from the year-ago quarter but expenses rose.
For the quarter that ended July 30, Marvell earned $192 million, or 31 cents per share, compared with $220 million, or 33 cents per share, a year earlier.
Excluding one-time items, Marvell earned 38 cents per share. Analysts polled by FactSet expected a penny less, on average.
The company’s revenue was essentially flat year over year at $898 million, though sequentially revenue from its mobile and wireless and hard disk drive businesses climbed.
Analysts were hoping for $889 million in revenue.
During a conference call with analysts to discuss its results, the company forecast adjusted net income of 41 cents per share on revenue of $940 million to $980 million in the current quarter.
Analysts were looking for 41 cents per share on $959 million in revenue at the time.
THE ANALYSIS: Kaufman Bros. analyst Mike Burton repeated his “Buy” rating for the stock in a client note Friday. Burton said the results and outlook are a “positive catalyst relative to investor expectations (there were multiple estimate cuts) and MRVL’s recent stock performance.” Burton said he believes Wall Street’s average earnings-per-share estimate won’t be lowered in the wake of its earnings call.
Burton reduced his price target for the stock by $2 to $18, attributing the change to recent weakness in the stock market overall.
SHARE ACTION: Marvell shares rose 71 cents, or 6 percent, to $12.68 in late trading.