Marvell Technology Group Ltd. (MRVL) announced its financial results for the third quarter on Thursday evening. Its adjusted earnings were in line with the consensus forecast but revenue slightly fell short of expectations, sending its shares down more than 5 percent in the pre-market trading session on Friday.
The Hamilton, Bermuda-based semiconductor company reported a loss of $22.9 million, or 3 cents per share for the quarter, narrower than a loss of $82.5 million, or 24 cents per share in the comparable period last year. On an adjusted basis, profit came in at 25 cents per share, matching analysts’ average estimate of 25 cents.
Revenue increased to $750.1 million in the quarter, versus $662.4 million in the same period of 2019. On the other hand, analysts were expecting Marvell
Speaking on the results, Marvell CEO Matt Murphy said in a statement that “strong 5G and Cloud product ramps are fueling our ongoing success in these strategic growth markets.”
Looking forward, the company projected adjusted profit in the range of 25 cents per share to 33 cents per share for the fourth quarter, as compared to the consensus forecast of 29 cents per share. Moreover, Marvell is looking to generate revenue between $745.8 million to $824.3 million for the current quarter, while analysts on average have a revenue forecast of $787.6 million.
The company recently announced another acquisition. It has decided to acquire Inphi Corp in a cash and stock transaction valued at $10 billion. The acquisition will help the company to boost its product portfolio related to networking products, besides strengthening its relationship with consumers in the cloud and telecommunication industry. It will also help it in accelerating its 5G plans.
Inphi is engaged in developing high-speed analog equipment and optical subsystems. Several customers use its interconnect components to connect data centers, as well as 5G networks through optical cables. The U.S. semiconductor industry has seen many mergers this year. For instance, Advanced Micro Devices (AMD) decided to acquire Xilinx for nearly $35 billion in September.
The latest acquisitions suggest that Marvell
Inphi is serving some of the biggest names in the tech industry including Amazon (AMZN), Google (GOOGL), Microsoft (MSFT), and Facebook (FB). These tech giants are using Inphi’s semiconductors for connecting their data centers.
Currently, 24 analysts have been maintaining a price target for Marvell
Few research firms recently updated their ratings and price targets for Marvell
On the other hand, analysts at research firm Summit Insights decreased their ratings for the stock to “Hold” from “Buy” on Friday following the Q3 results.
The company’s recent acquisition, stock momentum, and plans to establish itself as a leader in the data center chip and 5G infrastructure market suggest that it will do well in the coming months.