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Marvell (MRVL) to Report Q4 Earnings: What's in the Offing?

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Marvell Technology Group Ltd. (MRVL - Free Report) is set to report fourth-quarter fiscal 2021 results on Mar 3.

The company projects revenues of $785 million (up or down up to 5%) for the quarter. The Zacks Consensus Estimate for revenues is pegged at $786.17 million, suggesting growth of 9.55% from the year-ago period.

Marvell expects non-GAAP earnings per share between 25 cents and 33 cents. The consensus mark of 29 cents indicates a 70.59% increase, year over year.

Notably, Marvell's guidance for the fiscal fourth quarter takes into account the U.S. government's export restriction on certain Chinese customers. The company’s wider guidance range for revenues and earnings also reflects the uncertainties associated with the coronavirus pandemic.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10%.

Factors to Consider

Marvell is likely to have benefited from strong demand for its networking products mainly across the data-center and 5G infrastructure end markets.

Additionally, the acquisitions of Avera and Aquantia are projected to have driven Marvell’s networking segment revenues during the quarter under review. Aquantia’s solid pipeline of design wins is likely to have been a positive as well. The consensus mark for networking revenues is pegged at $443 million, calling for growth of 17.5% year over year.

Moreover, record bookings and ramping of multiple Ethernet design wins in upcoming vehicles are expected to have continued to drive strong revenue growth in the fourth quarter.

Management expects the fourth quarter to be a strong quarter for the company’s automotive business.

Notably, Marvell’s Storage business is likely to have rebounded, resulting in sequential revenue growth in the low teens on a percentage basis. This growth might have been driven by a strong recovery in the Fibre Channel business. Cloud storage revenues are also expected to have continued to grow, driven by significant contributions from Marvell’s preamplifiers. The Zacks Consensus Estimate for storage business revenues is pegged at $310 million, indicating an improvement from the year-ago quarter’s $296 million and the previous quarter’s $276 million.

However, certain supply-chain challenges are expected to have been a dampener, limiting Marvell’s ability to fully meet the increase in demand for some of its networking products.

Moreover, a pause in deployments in China is expected to have resulted in a decline in 5G ASICs, dampening the growth in the company’s networking business.

What Our Model Says

Our proven model does not predict an earnings beat for Marvell this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Marvell currently has a Zacks Rank of 3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Analog Devices, Inc. (ADI - Free Report) has an Earnings ESP of +0.05 and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Autodesk, Inc. (ADSK - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank of 2, at present.

ADT Inc. (ADT - Free Report) has an Earnings ESP of +25% and a Zacks Rank of 3, currently.

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