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Marvell Stock Up despite Weak Q4 Earnings Results


Mar. 12 2019, Published 12:44 p.m. ET

Marvell stock gained on Monday

Marvell Technology (MRVL) stock gained 3.75% on Monday and closed at $19.38. It seems that the stock has recovered from its March 8 decline of 2.6%, which came as a result of the company’s fourth-quarter fiscal 2019 results, wherein earnings missed Wall Street estimates, but revenues beat them. Marvell also forecasted lower-than-expected earnings and revenue guidance for the first quarter. The stock of the semiconductor giant gained 19.7% in the year-to-date period but lost 2.9% in March as of March 11.

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Marvell’s Q4 results

Marvell’s revenues of $745 million increased by 21.1% YoY in the fourth quarter. However, last month, the company had slashed its expectations for the fourth quarter of fiscal 2019 revenues due to sluggishness in the storage controller as well as its networking business. Further, the company is struggling with declining demand for its products amid an uncertain macroeconomic environment, a reduction in cloud capital spending, and shortages in PC CPU.

The company expects the weakness in demand to dent the first-quarter revenues too as customers continue to control inventory tightly. Seasonality and a slowdown in demand in China due to trade war fears will likely further hurt the revenues.

Nevertheless, the company expects its revenues to revive beginning in the second quarter. Marvell’s shift of focus to the infrastructure market is expected to boost the revenues as well. The Cavium business is also likely to pull up the top line.

Marvell is also gaining momentum in the automotive business and is making steady progress in 5G. During the fourth quarter, Marvell partnered with Samsung (SSNLF) and secured design wins in 5G to deliver embedded processors and baseband processors for both LTE and 5G base stations.

Revenues of closest rivals

Rivals Advanced Micro Devices (AMD) and Intel (INTC) reported lower-than-expected revenues of $1.42 billion and $18.66 billion in the fourth quarter. NVIDIA (NVDA), however, reported upbeat revenues of $2.21 billion in the fourth quarter of fiscal 2019, which ended in January.


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