Marvell quarterly results below estimates

Reuters News
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Posted: Mar 21, 2011 4:59 PM
Marvell quarterly results below estimates

SAN FRANCISCO (Reuters) - Chipmaker Marvell Technology Group <MRVL.O> posted worse-than-expected fourth-quarter results as investors worried soft personal computer sales could hit its hard-drive controller business.

The company, which supplies chips for Research In Motion <RIM.TO> and counts hard-drive maker Western Digital <WDC.N> as its largest customer, said revenue in the quarter ended in January rose 7 percent to $901 million year over year, but fell 6 percent from the prior quarter.

Analysts on average had expected Marvell to report fourth-quarter revenue of $924 million, according to Thomson Reuters I/B/E/S.

Hurt by concerns about soft PC sales and increasing competition in its smartphone processor business, Marvell has seen its shares fall around 2 percent so far in 2011, far underperforming the Philadelphia Semiconductor Index's <.SOX> 13 percent gain.

The growing popularity of tablets like Apple Inc's <AAPL.O> iPad has hit sales of PCs and the components that go in them, such as controllers for hard drives, which is a key business for Marvell.

Investors on the company's quarterly conference call will likely focus on how the PC market might affect Marvell's outlook, said Avian Securities analyst Matt Bryson.

"That and expectations around when they'll start shipping into new hard-drive platforms," he said.

Marvell said its net profit, excluding items, in the fourth quarter was $273 million or 40 cents a share, compared with $266 million or 40 cents a share in the year-ago period. Analysts had expected fourth-quarter net profit of 42 cents a share.

Shares of Marvell fell 1.2 percent to $18.00 in extended trading following the earnings report. The stock closed up 1.28 percent on Nasdaq.

(Reporting by Noel Randewich; Editing by Bernard Orr and Richard Chang)