March 4, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Marvell Technology Group (Nasdaq: MRVL ) dropped 11% in intraday trading today after fiscal fourth-quarter EPS and fiscal first-quarter guidance came in below consensus expectations.
So what: Non-GAAP EPS of $0.40, flat versus the year-ago quarter, missed the $0.42 consensus estimate on weaker-than-expected revenue. For the current quarter, management guided to non-GAAP EPS of about $0.30 and revenue of $800 million to $850 million -- below the consensus forecast of $0.36 and $850 million, respectively.
Now what: Marvell suffered from inventory issues, weak PC demand, and an unfavorable mix shift at a mobile device customer. Management believes the inventory challenges are "largely behind" it, PC-related demand will improve in March/April, and over the long term it can adapt to the mix shift at its mobile device customer. With PC demand being pressured by tablets and troubled Research In Motion (Nasdaq: RIMM ) an important Marvel mobile device customer, investors may want to stay on the sidelines pending more positive trends.
Interested in more info on Marvell? Add it to your watchlist by clicking here.