Please ensure Javascript is enabled for purposes of website accessibility

Why Marvell Technology Stock Jumped Today

By Evan Niu, CFA – May 29, 2020 at 12:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The chipmaker reported better-than-expected results in the fiscal first quarter.

What happened

Shares of Marvell Technology (MRVL -0.53%) have jumped today, up by 6% as of 12:50 p.m. EDT, after the company reported fiscal first-quarter earnings. The chipmaker topped Wall Street's forecasts for both sales and profits.

So what

Revenue in the fiscal first quarter came in at $694 million, easily beating the $678.7 million in sales that analysts were modeling for. That resulted in adjusted net income of $118 million, or $0.18 per share. The market was expecting just $0.14 per share in adjusted profit. Marvell generated $176 million in operating cash flow and finished the quarter with $668 million in cash on the balance sheet.

Engineer in clean suit inspecting a chip

Image source: Getty Images.

"In a challenging environment, solid execution by the Marvell team drove strong first quarter financial results with disciplined operating expense management, healthy operating cash flow, and revenue above the mid-point of guidance, enabled by stronger demand for our networking products from the datacenter and 5G infrastructure end markets," CEO Matt Murphy said in a statement. "While we did experience some COVID-19 supply chain impacts on our storage business in the first quarter, we expect a bounce back in the second quarter and we project our networking business to continue to grow."

Now what

The tech specialist's supply chain has been affected by U.S. government export restrictions on certain Chinese companies. Marvell was still able to offer some guidance, albeit with a wider range for revenue to accommodate greater uncertainties.

Revenue in the second quarter is expected to be $720 million, plus or minus 5%. Adjusted gross margin should be around 63%, and adjusted earnings per share are forecast at $0.17 to $0.23.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Marvell Technology Group Ltd. Stock Quote
Marvell Technology Group Ltd.
$43.29 (-0.53%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.