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Marvell Technology Group Ltd. Beats Earnings Targets, Shares Correct Down Anyhow

By Anders Bylund – Feb 20, 2014 at 10:57PM

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Marvell shares came into this fourth-quarter report on high hopes and strong stock gains. Even a strong earnings beat wasn't enough to support overheated share prices.

Image source: Marvell.

On Thursday night's release of fourth-quarter results, shares of Marvell Technology Group (MRVL 0.56%) lost the regular session's 2.3% gains. But don't cry for Marvell shareholders, as the stock had gained 71% over the last year, and 21% in the last three months alone, setting the stock up for a correction tonight.

The communications microchip designer reported non-GAAP earnings of $0.29 per share on $932 million in revenue. That's a 20% year-over-year sales boost, and 53% stronger earnings per share.

Marvell surpassed analyst targets on both the top and bottom lines. Wall Street firms were looking for earnings near $0.25 per share on roughly $900 million sales. Free cash flows fell 49%, to $82 million.

Looking ahead, Marvell's earnings guidance for the first quarter is largely in line with Wall Street's current $0.21 estimate, though the $870 to $910 million revenue range sits far above the Street's $850 million target.

"Fiscal year 2014 was the start of a turnaround for Marvell," said Marvell CEO Sehat Sutardja in a prepared statement. "We are investing in advanced technologies that will help drive increased business opportunities and continued revenue and profit growth in all of our target end markets."

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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Marvell Technology Group Stock Quote
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MRVL
$42.91 (0.56%) $0.24

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