Marvell Hits a Roadblock
Marvell reported revenues of $574 million for the second quarter, which ended July 29. Analysts were expecting Marvell to report revenues of $582.9 million and GAAP net income of $98.9 million, or 15 cents per share, according to Reuters Research . (See Marvell Reports Q2.)
The company didn't offer other numbers like net income, citing an ongoing internal review related to stock options grants. Like many other companies, Marvell is warning it won't make the deadline for its 10-Q filing with the Securities and Exchange Commission (SEC) , a move that can lead Nasdaq to issue a warning of delisting. (See Juniper Faces Delisting and Nasdaq Warns Foundry.)
Anyway, Marvell missed its second quarter target, and the third quarter won't get much better. "Most of the conditions that were present in Q2 continue into Q3," with Marvell likely to get a "lower than normal seasonal increase in demand" from the quarter, CFO George Hervey said on yesterday's conference call with analysts.
Revenues in the third quarter will grow just 1 percent from the second quarter, Hervey said. That pegs Marvell's third quarter revenues at about $579.7, compared with the $623.4 million analysts were expecting.
Marvell shares fell $1.78 (8.7%) to $18.70 in after-hours trading.
Marvell says most of its products, including those in storage, did okay in the second quarter. But two markets failed Marvell. One was the PC, where Gigabit Ethernet demand was "weak," Hervey said.
The other was in chips for 802.11n, the high-speed wireless LAN standard that, ironically, is taking the slow lane through the Institute of Electrical and Electronics Engineers Inc. (IEEE) standards process. (See Dot-N Delayed Again.) "Draft-N" products have begun shipping, and sales were weak as the channel got choked by a glut of them during the calendar second quarter, Hervey said.
In its July earnings call, Broadcom Corp. (Nasdaq: BRCM) reported a similar channel problem with 802.11n, with CEO Scott McGregor saying it was "typical of the initial retail launch" and nothing to worry about.
"Some of the competitors got too aggressive in terms of shipping the products -- more than what the channel could deliver," CEO Sehat Sutardja said on the call. Marvell didn't go so hog-wild, he claimed -- but even so, Marvell expects third quarter 802.11n sales to be weak.
— Craig Matsumoto, Senior Editor, Light Reading