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nc3
It is also hard for Marvell or anyone to make a profit when so much of the cell ...
WW Thinker
In the smartphone market, Marvell has to fight the two 800 pounds gorilla in ...
Marvell misses estimates on macro sluggishness
Dylan McGrath
8/16/2012 7:32 PM EDT
SAN FRANCISCO—Chip vendor Marvell Technology Group Ltd. Thursday (Aug. 16) reported sales for the quarter ended July 28 that came up short of analysts' expectations. Company executives, who cited macroeconomic sluggishness and lower demand for its smartphone chips from major customers, also provided a sales target for the current quarter that disappointed analysts.
"Our business was impacted by the slowing macroeconomic environment starting in the middle of the quarter," said Sehat Sutardja, Marvell's chairman, president and CEO, in a conference call with analysts following the company's quarterly report.
Sutardja said Marvell's fiscal second quarter sales were also hurt by lower chip demand from North American and Chinese smartphone vendors and by slowing PC sales.
"While we faced unexpected demand headwinds in Q2, we continued to deliver growth in our storage and networking end markets through share gains and new product ramps," Sutardja said.
Marvell (Santa Clara, Calif.) reported sales of $816 million for its fiscal second quarter, up 2 percent compared with the previous quarter and up 9 percent compared with the year-ago quarter. Marvell reported a net income in accordance with generally accepted accounting principles (GAAP) or $95 million, or 16 cents per share, down 2 percent from the previous quarter and down 52 percent compared to the year-ago quarter.
On a non-GAAP basis, excluding charges, Marvell reported a net income of $142 million, or 24 cents per share, up 2 percent from the previous quarter and up 39 percent from the year-ago quarter.
Marvell's results came in below consensus analysts' expectations, which called for sales of $852.7 million and non-GAAP earnings of 26 cents per share, according to Yahoo Finance.
For its fiscal third quarter, which closes in October, Marvell said it expects sales to be between $800 million and $825 million, well below consensus analysts' expectations of about $914 million. Clyde Hosein, Marvell's chief financial officer, noted that the midpoint of the company's fiscal third quarter sales target represents growth of only 1 percent sequentially.
"This growth rate is well below what is our typical historical seasonality and has been due to the combination of a poor macro environment and cellular customer declines, Hosein said. "Our forecast largely reflects our customers' view of near term flatish demand environment."
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"Our business was impacted by the slowing macroeconomic environment starting in the middle of the quarter," said Sehat Sutardja, Marvell's chairman, president and CEO, in a conference call with analysts following the company's quarterly report.
Sutardja said Marvell's fiscal second quarter sales were also hurt by lower chip demand from North American and Chinese smartphone vendors and by slowing PC sales.
"While we faced unexpected demand headwinds in Q2, we continued to deliver growth in our storage and networking end markets through share gains and new product ramps," Sutardja said.
Marvell (Santa Clara, Calif.) reported sales of $816 million for its fiscal second quarter, up 2 percent compared with the previous quarter and up 9 percent compared with the year-ago quarter. Marvell reported a net income in accordance with generally accepted accounting principles (GAAP) or $95 million, or 16 cents per share, down 2 percent from the previous quarter and down 52 percent compared to the year-ago quarter.
On a non-GAAP basis, excluding charges, Marvell reported a net income of $142 million, or 24 cents per share, up 2 percent from the previous quarter and up 39 percent from the year-ago quarter.
Marvell's results came in below consensus analysts' expectations, which called for sales of $852.7 million and non-GAAP earnings of 26 cents per share, according to Yahoo Finance.
For its fiscal third quarter, which closes in October, Marvell said it expects sales to be between $800 million and $825 million, well below consensus analysts' expectations of about $914 million. Clyde Hosein, Marvell's chief financial officer, noted that the midpoint of the company's fiscal third quarter sales target represents growth of only 1 percent sequentially.
"This growth rate is well below what is our typical historical seasonality and has been due to the combination of a poor macro environment and cellular customer declines, Hosein said. "Our forecast largely reflects our customers' view of near term flatish demand environment."
Related stories:
- Marvell co-founder: Combo chips are the future
- Nvidia says Android tablets have arrived
- Qualcomm sees 28-nm capacity crunch through 2012
- Broadcom not threatened by Samsung's CSR buy
- Yoshida in China: Vendors caught napping on smartphones
- Marvell unified 3G platform supports TD-SCDMA and WCDMA
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kinnar
8/17/2012 8:20 AM EDT
Marvell has designed good products for the smartphones, but still the sales in not showing increasing figures as compared to the sales of smartphones, this might be due to the reason of an affordability to the smartphone industries.
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dylan.mcgrath
8/17/2012 3:07 PM EDT
Possibly. Interesting to note that despite the growth in smartphones, Marvell cited lower sales volumes at RIM and slowing demand from two Chinese handset OEMs as dragging on its sales.
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WW Thinker
8/18/2012 6:11 AM EDT
In the smartphone market, Marvell has to fight the two 800 pounds gorilla in China - MediaTek and Qualcomm. On top, there are quite a few local incumbants like Spreadtrum, Leadcore, CQCY, ... Plus, STE and Renesas are as aggressive as ever given their losses. These fights are only going to become more intensive. Given these, do Mavell have the staying power?
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goafrit
8/17/2012 5:39 PM EDT
Marvell is simply reporting what others have been doing. From TI to ADI, these companies are showing that something is wrong with the global economy. We are in economic slump and that is the fact.
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nc3
8/19/2012 2:45 PM EDT
It is also hard for Marvell or anyone to make a profit when so much of the cell phone market is controlled by Samsung and Apple.
Both push cost hard and require chips to be sold at near cost to win socket.
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