3 key takeaways from Marvell Technology’s Q1 earnings report

Marvell Technology Inc (NASDAQ: MRVL) reported its financial results for the first quarter that beat Wall Street estimates. The company also forecast record revenue in fiscal Q2.

1. Financial performance

Marvell Technology swung to $88.2 million (£62.21 million) of loss in the first quarter that translates to 13 cents per share. In the same quarter last year, it had posted a higher $113 million of loss, or 17 cents per share.

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On an adjusted basis, the semiconductor company earned 29 cents per share versus the year-ago figure of 18 cents per share. Marvell generated $832.3 million of revenue in Q1 – an increase from $693.6 million last year.

According to FactSet, experts had forecast the company to post $806.7 million of revenue in the recent quarter and 27 cents of earnings per share. Marvell valued its cash and cash equivalents at $523 million at the end of the first quarter.

2. Guidance for the fiscal second quarter

For the fiscal second quarter, Marvell now forecasts up to $1.1 billion of revenue and 28 cents per share to 34 cents per share of adjusted EPS. In comparison, analysts are calling for a lower $841.1 million of revenue and 30 cents of adjusted per-share earnings.

If met, Q2 will mark the first quarter in history for Marvell to report more than $1 billion of revenue. The financial update comes more than a month after Marvell acquired Inphi Corp – a deal that it had announced last year in October.

3. CEO Matt Murphy’s remarks

Commenting on the earnings report and guidance, CEO Matt Murphy said:

“The acquisition of Inphi increases and accelerates our growth opportunity in the data centre, Marvell’s largest end market by revenue. Our outlook for strong revenue growth in the second quarter, however, highlights robust demand across all our key end markets. I have never felt stronger about our prospects and believe that we are at the beginning of a multi-year growth cycle.”

Impact on the share price

Marvell Technology was reported more than 5% up in after-hours trading on Monday. Including the price action, the stock is now exchanging hands at around $51 per share versus a year-to-date low of $40 per share in early March.

Marvell Technology performed largely upbeat in the stock market last year with an annual gain of close to 80%. At the time of writing, the Hamilton-based company has a market cap of $39.55 billion.