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Marvell (MRVL) to Report Q1 Earnings: What's in the Offing?

Marvell Technology MRVL is slated to report first-quarter fiscal 2025 results on May 30, after market close.

For the fiscal first quarter, the company projects total revenues of $1.15 billion (+/- 5%). It expects non-GAAP earnings per share to be 23 cents (+/- 5 cents).

The Zacks Consensus Estimate for revenues is pegged at $1.15 billion, indicating a decline of 12.9% from the year-ago quarter’s $1.32 billion. The consensus mark for earnings is pinned at 23 cents per share, suggesting a decline of 25.8% from the year-ago quarter’s 31 cents.

Marvell’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters and matched once, the average surprise being 3.1%.

Marvell Technology, Inc. Price and EPS Surprise

Marvell Technology, Inc. Price and EPS Surprise
Marvell Technology, Inc. Price and EPS Surprise

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

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In the fourth quarter of fiscal 2024, the semiconductor company reported revenues of $1.43 billion, which surpassed the consensus mark of $1.42 billion. The top line was also higher than the midpoint of management’s guidance of $1.42 billion (+/- 5%).

Moreover, it reported non-GAAP earnings of 46 cents per share, which came in line with the Zacks Consensus Estimate, as well as the midpoint of the company’s guidance.

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

Factors to Consider

Marvell’s first-quarter fiscal 2025 performance is likely to have been hampered by weakness in its product demand as enterprises are postponing their large IT spending plans amid macroeconomic uncertainties. Moreover, continued inventory correction actions by MRVL’s long-term customers are likely to have hurt the company’s overall performance in the to-be-reported quarter.

The company has been gaining from its investments in artificial intelligence, standard cloud infrastructure and 800-gig PAM solutions. These investments are likely to have aided MRVL’s top-line growth.

The company has been benefiting from the recovery of the data center market, which has been boosting its storage products. Marvell’s Electro-optics revenues are likely to have remained strong and initial shipments of cloud-optimized AI silicon programs are expected to have contributed to growth, partially offset by a seasonal decline in enterprise on-premise data center revenues.

Our estimate for Data Center division’s first-quarter fiscal 2025 revenues is pegged at $780.8 million, indicating a year-over-year increase of 79.2%.

During its last earnings conference call, Marvell projected to report a massive sequential decline in revenues across the majority of its end-market segments. The company had forecasted that overall Enterprise Networking revenues and carrier end market sales would plunge 40% and 50%, respectively.

Our estimate for Enterprise Networking’s revenues is pegged at $158.9 million, indicating a year-over-year decline of 56.4%. Our estimate for Carrier Infrastructure’s revenues is pegged at $84.9 million, indicating a year-over-year decline of 70.7%.

On the previous quarter’s earnings call, the company had projected revenues from the Consumer end market to decrease 70% on a quarter-over-quarter basis. The sales are expected to have declined because deliveries for an end-of-life program were completed in the previous quarter and demand from the game console market is expected to have been significantly weaker. Our model estimate suggests that revenues from the Consumer end market will plunge 69.6% year over year to $43.1 million.

The Automotive/Industrial segment’s performance is expected to have benefited from more ethernet-connected endpoints in cars and increased bandwidth needs. The company is likely to have gained from new ethernet design wins with various automotive OEMs. Our estimate for the segment’s first-quarter fiscal 2025 revenues is pegged at $82.3 million, indicating a year-over-year decrease of 7.8%.

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.

Though MRVL currently carries a Zacks Rank of 2, it has an Earnings ESP of -0.31%. 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, Dell Technologies DELL, Broadcom AVGO and REE Automotive REE have the right combination of elements to post an earnings beat in their upcoming releases.

Dell Technologies has an Earnings ESP of +2.30% and carries a Zacks Rank #2 at present. The company is scheduled to report first-quarter 2024 results on May 30. Its earnings estimates surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 39.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DELL’s first-quarter earnings is pegged at $1.25 per share, indicating a decline from the year-ago quarter’s $1.31. The consensus mark for revenues is pinned at $21.7 million, indicating a year-over-year increase of 3.7%.

Broadcom has an Earnings ESP of +3.66% and carries a Zacks Rank #3 at present. The company is scheduled to report second-quarter 2024 results on Jun 12. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 2.8%.

The Zacks Consensus Estimate for AVGO’s earnings is pegged at $10.79 per share, indicating year-over-year growth of 4.6%. The consensus mark for revenues is pegged at $12 billion, implying an increase of 37.88% from the year-ago quarter.

REE Automotive has an Earnings ESP of +5.26% and a Zacks Rank #2 at present. The company is slated to report first-quarter 2024 results on May 30.
The Zacks Consensus Estimate for first-quarter bottom-line is pegged at a loss of $1.81 per share. The consensus mark for REE’s revenues is pegged at $0.4 million.

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