“Inventory reductions, in particular at our storage customers, are impacting our near-term results and guidance,” said CEO Matt Murphy.
Marvell Technology (MRVL) – Get Free Report shares slumped lower Friday after the chipmaker posted softer-than-expected third quarter earnings and a muted near-term outlook.
Marvel said current quarter revenues would likely hit $1.4 billion, representing a year-on-year decline of around 9%, with gross margins in the region of 49.2%. Adjusted profits were pegged around 46 cents per share amid what CEO Matt Murphy described as a “changing demand environment” that will extend into next year as customers reschedule orders to manage excess chip inventories.
For the three months endings in October, Marvel posted adjusted earnings of 57 cents per share, missing Street forecasts by 2 cents, on record revenues of $1.54 billion that to growth in cloud, 5G and automotive sales.
Data center revenues were up 26% from last year at $627 million, while consumer revenues rose 9% to $178 million. Auto/industrial sales were up 26% to $84 million, Marvell said.
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“Early in the third quarter, we were still dealing with supply escalations. Late in the quarter, customers started requesting to push out shipments and reschedule orders to manage their inventory in a changing demand environment,” Murphy told investors on a conference call late Thursday.
“While we are not immune to the global slowdown impacting the semiconductor sector, we expect to finish this year growing revenue well above the industry and our long-term model, reflecting our continued focus on data infrastructure,” he added. “Looking forward to the next fiscal year, we remain confident in our key growth drivers of cloud, 5G, and auto.”
Marvell shares were marked 6.9% lower in pre-market trading to indicate an opening bell price of $42.26 each, a move that would extend the stock’s six-month decline to around 31.2%.
