Weak PC sales weigh on Marvell outlook, shares down

Reuters News
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Posted: Aug 16, 2012 4:18 PM
Weak PC sales weigh on Marvell outlook, shares down

(Reuters) - Chipmaker Marvell Technology Group Ltd's <MRVL.O> second-quarter results missed lowered wall estimates on sputtering PC sales and market share losses at its mobile chips business, sending its shares down 8 percent in extended trade.

"Our results in the second quarter were affected primarily by the slowdown in the macro-economic environment that impacted our storage and mobile end markets," Chief Executive Sehat Sutardja said.

The company missed its own guidance for the three-month period and lagged Wall Street's expectations for the first time in five quarters.

Falling PC sales and woes at key customer Research in Motion <RIM.TO> have weighed on growth, keeping Wall Street's expectations at check and pushing the stock down almost 30 percent in the last six months.

Marvell is a key supplier for microcontrollers used in hard-disk drives (HDD) sold mainly by Western Digital Corp <WDC.O>.

"For those who were paying attention to the disk drive market during the quarter, this is not much of a surprise," RBC analyst Doug Freedman said, referring to slowing hard drive shipments.

Marvell's second-quarter profit fell to $93 million, or 16 cents a share, from $192 million, or 31 cents a share, a year earlier.

Excluding one-time charges, it earned 24 cents a share, 2 cent short of analysts' expectations, according to Thomson Reuters I/B/E/S.

Revenue fell 9 percent to $816 million, compared with expectation of $852 million.

Shares of the company were down 8 percent at $11.40 in extended trade on Thursday.

(Reporting by Himank Sharma in Bangalore; Editing by Saumyadeb Chakrabarty)