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Marvell (MRVL) Gains on Q1 Earnings Beat, Strong Guidance

Apogee (APOG) Q2 Earnings Top Estimates, FY24 EPS View Rises

Marvell Technology MRVL stock rallied 3.6% in Thursday’s extended trading session after the semiconductor company reported better-than-expected first-quarter fiscal 2023 results and provided strong guidance for the second quarter.

The company reported splendid first-quarter results, wherein earnings and revenues not only surpassed the respective Zacks Consensus Estimate but also improved significantly year over year. California-based Marvell delivered non-GAAP earnings of 52 cents per share, beating the consensus mark by a penny. The bottom line improved 79% from the year-ago quarter.

Marvell reported revenues of $1.45 billion, which outpaced the Zacks Consensus Estimate of $1.43 billion. The top line increased 74% from the year-earlier quarter’s reported figure. This upsurge can primarily be attributed to substantial growth in all end markets, particularly the data center end market.

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote

Quarter Details

In the first quarter, Marvell registered year-over-year revenue growth across all its end markets.

Data center revenues soared 131% year over year to $640.5 million. The segment accounted for 44% of fiscal first-quarter total revenues, highlighting that it is currently MRVL’s largest end market compared with the rest.

Carrier infrastructure revenues, which constituted 18% of total revenues, grew 50% year over year to $252 million.

Revenues from enterprise networking jumped 64% year over year to $286.6 million and accounted for 20% of total revenues.

Consumer revenues, representing 12% of total revenues, climbed 7% to $178.5 million.

Automotive/Industrial revenues jumped 94% year over year to $89.3 million. Revenues from the segment constituted 6% of total revenues.

Marvell’s non-GAAP gross profit rose 77% to $947 million in the first quarter. Consequently, the margin expanded 120 basis points (bps) to 65.5%.

Non-GAAP operating expenses flared up 42% year over year to $435.3 million. The non-GAAP operating margin expanded 790 bps year over year to 35.4%.

Balance Sheet and Cash Flow

Marvell exited the first quarter with cash and cash equivalents of $465 million compared with the previous quarter’s $613.5 million. The company’s long-term debt totaled $4.47 billion.

The company generated $194.8 million in cash through operational activities in the first quarter.

Marvell returned $50.9 million to shareholders through dividend payouts and repurchased stocks worth $15 million in the first quarter.

Guidance

For the second quarter of fiscal 2023, Marvell expects strong revenue growth, driven by the data center end market, accelerated 5G adoptions in the United States and other regions, and broad growth across multiple products. The company projects fiscal second-quarter revenues of $1.515 billion (+/- 3%).

The non-GAAP gross margin is likely to be 65-65.5%, while non-GAAP operating expenses are estimated at approximately $435 million.

The company projects non-GAAP earnings per share for the second quarter to be approximately 56 cents (+/- 3 cents).

Zacks Rank & Other Stocks to Consider

Marvell currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader technology sector are ON Semiconductor ON, Analog Devices ADI and MaxLinear MXL. ON currently sports a Zacks Rank #1 (Strong Buy), while Analog Devices and MaxLinear each carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ON's second-quarter 2022 earnings has been revised to $1.26 per share from $1.05 over the past 30 days. For 2022, earnings estimates have moved north by 17.5% to $4.91 per share in the past 30 days.

ON's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have rallied 47.3% in the past year.

The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 5 cents to $2.42 per share over the past seven days. For fiscal 2022, earnings estimates have moved north by 16 cents to $9.24 per share in the past seven days.

Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have increased 0.5% in the past year.

The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by 10 cents to $1.02 per share over the past 30 days. For 2022, the Zacks Consensus Estimate for MaxLinear's earnings has moved north by 36 cents to $4.07 per share in the past 30 days.

MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.1%. Shares of MXL have rallied 2.9% in the past year.


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