Marvell Has Loss for FY2016, Ended in January
Marvell Technology Group Ltd. (Nasdaq: MRVL) reported a loss of $811 million on revenue of $2.7 billion for its fiscal 2016. That compares to Marvell's FY2015, when the company made a profit of $435 million on sales of $3.7 billion.
The size of the loss was inflated by a $750 million payment in the second quarter to settle a patent dispute with Carnegie-Mellon University. In May 2015, the company acknowledged accounting problems, and hadn't filed an official quarterly or annual report since. It is still in the process of catching up; the report issued today only covers the 12 months through last January 30 (Marvell's fiscal year is ahead of, and slightly offset from, the calendar year). In recent months, investors forced changes in Marvell's board of directors, and brought in a new executive team. (See Marvell Board Caps Regime Change.)
Today's report includes restated numbers for Q2 and Q3 of Marvell's FY2016, and the first look at the results of Q4. Looking at those three quarters in chronological order, the company narrowed its losses from $772 million (including the settlement with CMU) to $58 million to $4 million, on revenues that declined from $710 million to $675 million to $616 million. Marvell said Q4 sales for its HDD (hard disk drive) controllers were up by 12% sequentially, offset by "slightly lower" SSD (solid state drive) controller sales. Networking revenue was up 8%. Mobile and wireless revenue was down 34%. Sluggishness in the mobile phone market has had downstream consequences for a number of suppliers, including Marvell, which in September tipped plans to exit the business entirely.
Although the company experienced quarterly upticks in the sales of drive controllers and networking devices, for the entire year sales in both segments were down due to slowness in the PC business and in weakening enterprise demand for switchers/routers, respectively, the company said. Again, these were the market conditions as of last January.
— Brian Santo, Senior Editor, Components, T&M, Light Reading
