Shares of Marvell Technology Group (NASDAQ:MRVL) rose on Friday following the company's third-quarter report. In addition to beating analyst estimates for both revenue and earnings, Marvell announced a $1 billion share repurchase program. At 2:45 p.m. EST, the stock was up about 10%.
Marvell reported third-quarter revenue of $654.4 million, down 3% year over year but about $38 million higher than the average analyst estimate. CEO Matt Murphy pointed to double-digit growth in Marvell's core data storage and network infrastructure businesses as the main driver behind the better-than-expected revenue.
Non-GAAP earnings per share (EPS) came in at $0.20, up from $0.06 during the prior-year period and $0.08 higher than analyst expectations. GAAP operating expenses were slashed by 19.5% compared to the third quarter of 2015, driving earnings higher despite lower revenue. Marvell announced a restructuring effort earlier this month aimed at reducing its annual operating expenses to the range of $820 million to $840 million, down from a current annualized run rate of $1.08 billion.
In addition to reporting its results, Marvell announced that it had authorized a $1 billion share buyback program. This replaces a previous $3.25 billion buyback program that has $115 million of repurchase authority remaining. Marvel expects to buy back about $500 million worth of shares over the next year.
Marvel expects fourth-quarter revenue of $565 million, excluding discontinued operations. The company points out that this reflects normal seasonality, but analysts were expecting revenue guidance of $594.6 million. Non-GAAP EPS is expected between $0.17 and $0.21, above analyst expectations of $0.13.
While Marvell's guidance was mixed, the company's focus on cutting costs and driving profitability higher seems to be resonating with investors.