What: Shares of semiconductor company Marvell Technology Group (NASDAQ:MRVL) soared on Wednesday following the release of company's fourth-quarter earnings report. Marvell's results were mixed, beating analyst estimates for earnings but falling short on revenue. At 12:45 p.m. ET, the stock was up about 14%.
So what: Marvell reported quarterly revenue of $616 million, down 28% year over year and about $36 million shy of the average analyst estimate. Storage and networking revenue increased sequentially, while the mobile and wireless businesses suffered steep declines. Marvell expects the mobile business to continue to decline through fiscal year 2017 as it carries out previously announced restructuring actions.
Non-GAAP EPS came in at $0.11, down from $0.25 during the prior-year period but $0.02 better than analysts were expecting. While Marvell's results showed steep declines in both revenue and earnings, an analyst from Brean Capital came to the company's defense following the earnings announcement. Brean reiterated a buy rating, saying that Marvell's new strategy was impressive, and that much of the revenue declines were due to restructuring efforts in the mobile and wireless businesses.
Now what: Marvell's CEO and president resigned in April due in part to accounting issues at the company. At the time, Marvell provided vague revenue guidance, saying only that it expects fiscal 2016 revenue to decline significantly, driven by decreased demand for its storage products and the restructuring of its mobile business.
Marvell managed to grow storage and networking sales sequentially during the fourth quarter, a piece of good news that was enough to send the stock soaring. The company will need to continue to show progress in order to keep investors on board.
Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.