Marvell Technology shares climb after strong 3Q

AP News
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Posted: Dec 04, 2009 1:27 PM

Shares of chip maker Marvell Technology Group Ltd. hit a 12-month high Friday after the company reported a jump in profit and offered an upbeat outlook.

Marvell "once again delivered strong results and provided an outlook that was better than expected on all fronts," Deutsche Bank analyst Sukhi Nagesh told investors in a note, raising the company's price target to $18 from $16.

Nagesh kept a "Hold" rating on the stock, however, waiting for "further clarification" on whether Marvell can keep up its profit margins.

Marvell, which makes chips that are used in communications equipment and data storage devices, said late Thursday that it earned $201.6 million in the most recent quarter, up from $70.9 million in the same quarter a year ago.

Revenue edged up by a little less than 2 percent to $803 million.

For the quarter ending in January, the company expects revenue of between $820 million and $850 million, while analysts polled by Thomson Reuters were expecting only $780 million.

Caris & Co. analyst Nicholas Aberle reiterated an "Above Average" rating on Marvell.

"As revenue levels continue to improve," Aberle said, cost cutting moves put in place during the recession "will bear fruit in the form of expanding profit margins."

Marvell shares were up $1.26, or 7.6 percent, to $17.79 in afternoon trading after hitting a new 12-month high of $18.20 earlier in the day. The stock has traded between $5.66 and $16.85 over the past year.