Sunday, July 1, 2012

Earnings Preview: Marvell Technology Group

Marvell Technology Group (MRVL) is expected to report Q1 earnings after the market close on Thursday, May 20, with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 37c for EPS and $845.29M for revenue, according to First Call.

Analyst Views

Credit Suisse expects Marvell to post upside to Q1 estimates with revenues at or slightly above the high end of company guidance of $825M-$860M, or flat to up, or down 2% quarter-over-quarter. Credit Suisse is currently modeling $843M for Q1 with upside from a pick up in mobile/wireless and modest HDD share gains. Credit Suisse expects the gross margin to be in-line with the approximate 59.7% guidance provided, and 2c-4c upside to their 38c EPS estimate. Looking forward: Credit Suisse expects upside to their Q2 estimates of $855M, or up 2% q/q, and 35c for EPS. Consensus is $864M and 36c.

While management may guide conservatively, Credit Suisse believes upside to their estimates could come from market share gains in storage, which is 51% of revenues, from HDD controller ramps at Seagate (STX), and Hitachi. Wireless growth is anticipated from smartphone combo chips and apps processor ramps in smartphones, as well as a pick up in enterprise networking.

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