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Marvell stock heads south after weak forecast

Jeremy C. Owens

Marvell Technology Group Ltd. shares dropped more than 4% Thursday afternoon after the company predicted in a quarterly earnings report that it will struggle for the next couple of months. Marvell reported fiscal fourth-quarter losses of $261 million, or 40 cents a share, on sales of $744.8 million, up from $615.4 million in the year-ago quarter. After adjustments for stock-based compensation and other "special items," the chip maker claimed earnings of 25 cents a share, down from 32 cents a share a year ago. Analysts on average expected adjusted earnings of 25 cents a share on sales of $740 million, according to FactSet. Marvell's forecast for the fiscal first quarter, which began Feb. 3, did not live up to expectations, however. The company said it expects adjusted earnings of 12 to 16 cents a share on sales of about $650 million, give or take 3%. Analysts on average had modeled adjusted earnings of 23 cents a share on sales of $718 million, according to FactSet. Marvell stock closed with a 2.2% decline at $19.17, but was trading for less than $18.40 in after-hours action immediately following the report's release. Shares have declined 10.1% in the past year, as the S&P 500 index has gained 1.6%.