Marvell Technology plunges as company blames inventory reductions for weak Q3, guidance
Marvell Technology (NASDAQ:MRVL) shares plunged more than 8% in extended-hours trading after the semiconductor company posted third-quarter results that missed expectations and offered a weak outlook for the fourth-quarter, citing inventory reductions at its customers.
For the period ending October 29, Marvell (MRVL) earned 57 cents per share, excluding one-time items, on $1.54B in revenue. The company said inventory reductions, in particular at the company's storage customers, impacted the results.
Analysts were expecting the company to earn 59 cents per share on $1.56B in revenue.
Looking ahead, Marvell (MRVL) said it expects fourth-quarter revenue to be between $1.33B and $1.43B, below the $1.62B that analysts were expecting. Inventory reductions were also blamed for the shortfall.
"Inventory reductions, in particular at our storage customers, are impacting our near-term results and guidance, and we are working closely with them to manage their change in demand in an orderly fashion to clear the path to a resumption of growth," Matt Murphy, Marvell's President and CEO, said in a statement.
The company also expects adjusted gross margin in the period to be about 64%, compared to estimates of 65.1%.Marvell (MRVL) will hold a conference call at 4:45 p.m. EST to discuss the results.
Last month, Credit Suisse initiated coverage on the semiconductor industry with an overweight rating, highlighting Marvell Technology (MRVL) among several other companies due to their long-term growth potential.