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International Rectifier, Marvell To Post FQ4; Credit Suisse Says Recovery Priced In

John Seward

International Rectifier (NYSE: IRF) and Marvell Technology (NASDAQ: MRVL) are slated to post results this week, and one analyst said Monday that each of the chip-makers might offer a slight top-line surprise.

But Credit Suisse's Christopher Rolland rates both companies at Market Perform, citing valuation, with an IRF target of $28 and $17 for Marvell.

Rolland likens the business cycle recovery for chip makers to a baseball game.

"We're in the seventh inning," Rolland said in a research note Monday. "The middle to later stages of the recovery are already priced in."

International Rectifier is set to post fiscal fourth quarter results Wednesday. It has seen its shares drop nine percent since the start of the current earnings season. Rolland sees a slight revenue beat coming.

A conservative outlook by investors suggests that the shares could rise if the company's first-quarter revenue outlook is “better than a 200 basis-point miss,” Rolland said.

That would mean guidance of $286 million versus the current consensus forecast of $292 million.

When Marvell posts earnings Thursday, Rolland thinks revenue may beat expectations because of higher-than expected demand from mobile handset makers in China, but Rolland thinks nobody will care.

“Investors are increasingly discounting mobile and wireless contribution, “ Rolland said, citing perceptions of its relative lack of profitability and looming competition from new products expected later this year.

Analysts forecast International Rectifier will post earnings of $0.29 per share on revenue of $288.24 million. The year-earlier adjusted loss was $0.09 per share on revenue of $276.45 million.

The consensus calls for Marvel earnings of $.0.28 per share on revenue of $961.38 million. A year earlier earnings were $0.15 per share on revenue of $807.6 million.

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