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.
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.