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Marvell (MRVL) Q1 Earnings Coming Up: What Should You Know?

Marvell Technology MRVL is slated to release first-quarter fiscal 2024 results on May 25.

For the fiscal first quarter, the company projects total revenues of $1.3 billion (+/- 5%). Marvell projects non-GAAP earnings per share for the fiscal first quarter to be approximately 29 cents (+/- 5 cents).

The Zacks Consensus Estimate for revenues is pegged at $1.30 billion, indicating a decrease of 10.1% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 29 cents per share, implying a year-over-year decrease of 44.2%.

Marvell’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while matching once and missing the same on one occasion, the average surprise being 0.1%.

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Let’s see how things have shaped up before this announcement.

Marvell Technology, Inc. Price and EPS Surprise

Marvell Technology, Inc. price-eps-surprise | Marvell Technology, Inc. Quote

Factors to Consider

Marvell’s first-quarter performance is likely to have been negatively impacted by softness in its product demand as original equipment manufacturers (OEMs) are rescheduling orders to manage excess chip inventories. As a result of broadening inventory corrections, MRVL forecast first-quarter fiscal 2024 revenues from its Data Center end market to decline in the mid-teens sequentially on a percentage basis.

The Zacks Consensus Estimate for the Data Center division’s first-quarter revenues is pegged at $422 million. This calls for a 34.2% decline from the year-ago quarter’s revenues of $641 million.

Weakening consumer spending amid the rising concern over the global recession is also likely to have hurt the company’s sales across the Consumer segment. The consensus mark suggests that the division’s revenues are likely to decline to $162 million in the first quarter from $179 million in the year-ago quarter.

Enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues, which is likely to have negatively impacted Marvell’s overall financial performance in the to-be-reported quarter. The company forecasts overall Enterprise Networking revenues to decline sequentially in the high-single-digit percentage range.

However, the negative impact of the aforementioned factors is likely to have been partially offset by the solid demand for its Carrier Infrastructure end market products. The strong adoption of 5G is likely to have favored MRVL’s wireless end-market performance, boosting its overall carrier end-market revenues in the first quarter.

For the first quarter, Marvell anticipates revenues from the overall Carrier Infrastructure end market to grow in the mid-single digits sequentially and in the mid-teens year over year on a percentage basis. The Zacks Consensus Estimate for the segment’s revenues is pegged at $290 million, implying an increase of 5% sequentially and 15% year over year.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Marvell this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Marvell currently carries a Zacks Rank #5 (Strong Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, HP Inc. HPQ, Zscaler ZS and Jabil JBL have the right combination of elements to post an earnings beat in their upcoming releases.

HP is set to report second-quarter fiscal 2023 results on May 30. The company has a Zacks Rank #2 and an Earnings ESP of +1.85% at present. HP’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HPQ’s second-quarter earnings is pegged at 76 cents per share, suggesting a decline of 29.6% from the year-ago quarter’s earnings of $1.11. HP’s quarterly revenues are estimated to decrease 20.7% year over year to $13.07 billion.

Zscaler carries a Zacks Rank #3 and has an Earnings ESP of +4.47%. The company is scheduled to report third-quarter fiscal 2023 results on Jun 1. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 29.7%.

The Zacks Consensus Estimate for Zscaler’s third-quarter earnings stands at 42 cents per share, implying a year-over-year increase of 147.1%. It is estimated to report revenues of $410.7 million, which suggests an increase of approximately 43.2% from the year-ago quarter.

Jabil carries a Zacks Rank #3 and has an Earnings ESP of +3.38%. The company is expected to report third-quarter fiscal 2023 results on Jun 15. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.6%.

The Zacks Consensus Estimate for JBL’s third-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 10.5%. The consensus mark for revenues stands at $8.17 billion, suggesting a year-over-year drop of 1.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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