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Marvell (MRVL) Q1 Earnings and Revenues Beat Expectations

Marvell Technology MRVL reported better-than-expected results for the first quarter of fiscal 2024, wherein both the bottom line and top line outpaced the Zacks Consensus Estimates.

California-based Marvell reported non-GAAP earnings of 31 cents per share, beating the Zacks Consensus Estimate of 29 cents. The semiconductor company reported revenues of $1.32 billion, which surpassed the consensus mark of $1.30 billion.

However, the non-GAAP earnings per share and revenues fell 40.4% and 9%, respectively, from the year-ago quarter. This decline can primarily be attributed to customer inventory reduction actions, partially offset by substantial growth in all end markets except the data center and 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 decreased 32% year over year to $435.8 million. The segment accounted for 33% of the quarter’s total revenues, highlighting that it is currently MRVL’s largest end market.

Revenues from enterprise networking jumped 27% year over year to $364.6 million and accounted for 27.6% of total revenues.

Carrier infrastructure revenues, which constituted 21.9% of total revenues, grew 15% year over year to $289.9 million.

Automotive/Industrial revenues remained flat year over year at $89.3 million. Revenues from this segment constituted 6.8% of total revenues.

However, consumer revenues, representing 10.8% of total revenues, declined to $142.1 million from $185.4 million in the year-ago quarter.

Marvell’s non-GAAP gross profit declined 16.3% to $792.5 million in the first quarter. The margin contracted 550 basis points (bps) to 60%.

Non-GAAP operating expenses flared up 5.4% year over year to $458.6 million. The non-GAAP operating margin contracted 1020 bps to 25.2%.

Balance Sheet and Cash Flow

Marvell exited the first quarter with cash and cash equivalents of $1.03 billion compared with the previous quarter’s $911 million. The company’s long-term debt totaled $3.15 billion, lower than the previous quarter’s $3.91 billion.

The company generated cash worth $208.4 million through operational activities in the fiscal first quarter.

Marvell returned $51 million to shareholders through dividend payouts in the fiscal first quarter.

Guidance

For the second quarter of fiscal 2024, Marvell expects revenues of $1.330 billion (+/- 5%). The non-GAAP gross margin is likely to be approximately 60-61%, while non-GAAP operating expenses are estimated to be around $455 million.

The company projects non-GAAP earnings per share for the second quarter to be approximately 32 cents (+/- 5 cents).

Zacks Rank & Stocks to Consider

Marvell currently has a Zacks Rank #5 (Strong Sell). Shares of MRVL have dropped 13.2% over the past year.

Some top-ranked stocks from the broader Computer and Technology sector are Meta Platforms META, Momo MOMO and ServiceNow NOW, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 17.6% upward to $2.87 per share over the past 30 days. For 2023, earnings estimates have moved north by 14.8% to $12.04 in the past 30 days.

META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have climbed 31.9% in the past year.

The Zacks Consensus Estimate for Momo’s first-quarter 2023 earnings has been revised southward from 36 cents to 32 cents per share over the past 60 days. For 2023, earnings estimates have moved down by 3 cents to $1.55 in the past 60 days.

MOMO's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%. Shares of the company have jumped 53.3% in the past year.

The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 13 cents to $2.05 per share over the past 30 days. For 2023, earnings estimates have moved up by 37 cents to $9.59 in the past 30 days.

NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched up 16.9% in the past year.

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