BC-MARVELLTECHNOLOGY/ (UPDATE 3)
UPDATE 3-Marvell Q4 revenue rises; shares fall
+ Q4 EPS ex-items 40 cts vs Street view 37 cts
+ Q4 rev $842.5 mln vs Street view $842 mln
+ Shares down 6 pct, have more than doubled in past year
(Adds forecasts, updates shares)
SAN FRANCISCO (Reuters) - Chipmaker Marvell Technology Group Ltd posted a 64 percent rise in quarterly revenue on a resurgence in tech spending, but its shares fell 6 percent as some investors had expected an even bigger increase.
Marvell's sales were $842.5 million, in line with the average Wall Street estimate of $842 million, but the market had been banking on a big beat, an analyst said. The stock had more than doubled over the past year and ahead of the results.
"They really didn't beat by much on the top line," said Brigantine Advisors analyst Allan Mishan, though he added that profit and gross margin looked strong.
About half of Marvell's revenue comes from selling chips for the storage market, though the company also has been expanding aggressively in other areas, including smartphones and electronic readers. It offers low-cost chipsets for these devices, which Marvell says will help drive down selling prices.
Marvell said net profit was $204.8 million, or 31 cents a share, in its fiscal fourth quarter ended Jan. 30, compared with a loss of $65 million, or 11 cents a share, in the year-ago period.
Excluding items, profit was 40 cents a share, beating the average analyst estimate of 37 cents a share, according to Thomson Reuters I/B/E/S.
The company posted a gross margin of 59.7 percent and a non-GAAP gross margin of 60 percent. The average Wall Street target was for 58.8 percent.
The company's Chief Financial Officer Clyde Hosein told investors in a conference call that the company expects its first quarter non-GAAP gross margin to be roughly 60 percent.
Analysts on average had been expecting gross margin of 57.91 percent for the first quarter, and 57.88 percent for the full year.
Hosein said Marvell expects first quarter earnings between 30 cents and 40 cents per share, excluding items. Analysts had been expecting 32 cents per share.
And revenue for the first quarter is expected between $825 million and $860 million, as opposed to analysts' expectations of $798.26 million.
Company executives said those targets had come as a result of company restructuring, a better product portfolio, and cost cutting efforts.
Additionally, company executives said response to new products, such as Microsoft Corp's Windows 7 system were spurring demand past typically seasonal levels.
Marvell derives roughly a quarter of revenue from handset makers. Its main customers include hard-drive maker Western Digital Corp and BlackBerry maker Research in Motion Ltd.
Shares of Marvell, which is incorporated in Bermuda but headquartered in Santa Clara, Calif., fell to $18.90 in extended trading after closing at $20.13 on the Nasdaq. (Reporting by Gabriel Madway and Ian Sherr, editing by Matthew Lewis and Carol Bishopric)
