Yahoo Finance Marvell (MRVL) Falls 7% as Q3 Earnings & Sales Miss Estimates
Marvell Technology MRVL stock lost 7.3% during Thursday’s extended trading session in response to the lower-than-expected top and bottom-line results for the third quarter of fiscal 2023. However, the company’s quarterly revenues and earnings marked significant year-over-year improvement.
California-based Marvell reported non-GAAP earnings of 57 cents per share that missed the Zacks Consensus Estimate by a couple of cents. The semiconductor company reported revenues of $1.54 billion, which also lagged the consensus mark of $1.56 billion.
However, the non-GAAP earnings per share improved 32.6% from the year-ago quarter while revenues soared 27%. This upsurge can primarily be attributed to substantial growth in all end markets except the consumer market.
Marvell Technology, Inc. Price, Consensus and EPS Surprise
Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote
Quarter Details
Data center revenues increased 25.5% year over year to $627.3 million. The segment accounted for 41% of the quarter’s total revenues, highlighting that it is currently MRVL’s largest end market.
Carrier infrastructure revenues, which constituted 18% of total revenues, grew 26.2% year over year to $271.4 million.
Revenues from enterprise networking jumped 52.1% year over year to $376 million and accounted for 24% of total revenues.
However, consumer revenues, representing 12% of total revenues, declined to $178.4 million from $182.5 million in the year-ago quarter.
Automotive/Industrial revenues jumped 26.4% year over year to $84.2 million. Revenues from this segment constituted 5% of total revenues.
Marvell’s non-GAAP gross profit rose 24.8% to $984.3 million in the third quarter. However, the margin contracted 110 basis points (bps) to 64%.
Non-GAAP operating expenses flared up 13.4% year over year to $420.4 million. The non-GAAP operating margin expanded 220 bps to 36.7%.
Balance Sheet and Cash Flow
Marvell exited the third quarter with cash and cash equivalents of $723.4 million compared with the previous quarter’s $617.1 million. The company’s long-term debt totaled $3.93 billion, lower than the previous quarter’s $3.95 billion.
The company generated cash worth $411 million and $937.3 million through operational activities in the third quarter and the first nine months of fiscal 2023, respectively.
Marvell returned $51.1 million to shareholders through dividend payouts and repurchased stocks worth $50 million in the third quarter. In the first three quarters of fiscal 2023, the company repurchased stocks worth $115 million and paid $153.1 million in dividends.
Guidance
For the fourth quarter of fiscal 2023, Marvell expects revenues of $1.4 billion (+/- 5%). The non-GAAP gross margin is likely to be approximately 64%, while non-GAAP operating expenses are estimated to be around $430 million.
The company projects non-GAAP earnings per share for the fourth quarter to be approximately 46 cents (+/- 5 cents).
Zacks Rank & Key Picks
Currently, Marvell carries a Zacks Rank #4 (Sell). The stock has plunged 46.8% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Celestica CLS, Zscaler ZS and Blackbaud BLKB. Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Blackbaud each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved up 9.4% to $1.86 per share in the past 60 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have gained 0.3% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny south to $1.17 per share in the past 30 days.
ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 58.4% YTD.
The Zacks Consensus Estimate for Blackbaud's fourth-quarter 2022 earnings has been revised 3 cents southward to 58 cents per share over the past 30 days. For 2022, earnings estimates have moved upward by 4 cents to $2.59 per share in the past 30 days..
Blackbaud's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 4.9%. Shares of BLKB have slumped 24.9% YTD.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report
Celestica, Inc. (CLS) : Free Stock Analysis Report
Blackbaud, Inc. (BLKB) : Free Stock Analysis Report
Zscaler, Inc. (ZS) : Free Stock Analysis Report
