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What's in the Offing for Marvell's (MRVL) Q1 Earnings?

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Marvell Technology Group Ltd. (MRVL - Free Report) is slated to report first-quarter fiscal 2022 results on Jun 7.

The company projects revenues of $800 million (up or down up to 5%) for the quarter. The Zacks Consensus Estimate for revenues is pegged at $803 million, suggesting growth of 15.8% from the year-ago period.

Marvell expects non-GAAP earnings per share to lie between 23 cents and 31 cents. The consensus mark of 27 cents indicates a 50% increase, year over year.

Notably, Marvell's guidance for the fiscal first quarter takes into account the U.S. government's export restrictions 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 8.4%.

Let’s see how things have shaped up prior to this announcement.

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 $487 million, calling for growth of 23.6% year over year.

Moreover, record bookings and ramping of multiple Ethernet design wins in upcoming vehicles are anticipated to have driven healthy revenue growth during the fiscal first quarter.

Management expects the automotive business to have put up an impressive show during the period in discussion.

Furthermore, Marvell estimates its Storage business to register more than 10% year-over-year growth during the fiscal first quarter. The Zacks Consensus Estimate for storage business revenues is pegged at $284 million, calling for an improvement from the year-ago quarter’s $259 million.

This upswing is likely to have been driven by a strong recovery in the Fibre Channel business. Cloud storage revenues are also likely to have continued improving on significant contributions from Marvell’s preamplifiers.

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

Also, the U.S. government's export restrictions on certain Chinese customers are likely to have weighed on the top line.

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 carries a Zacks Rank of 3 and has 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:

Darden Restaurants, Inc. (DRI - Free Report) has an Earnings ESP of +4.70 and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Signet Jewelers Limited (SIG - Free Report) has an Earnings ESP of +2.84% and holds a Zacks Rank of 2, at present.

KB Home (KBH - Free Report) has an Earnings ESP of +1.87% and carries a Zacks Rank of 2, currently.

5 Stocks Set to Double

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