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Marvell (MRVL) Tops Q1 Earnings & Revenue Estimates, Guides Solid

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Marvell Technology Group (MRVL - Free Report) delivered first-quarter fiscal 2022 non-GAAP earnings of 29 cents, beating the Zacks Consensus Estimate of 27 cents. Moreover, the reported figure surged 61.1% from the year-ago quarter tally.

Marvell’s revenues of $832.3 million surpassed the consensus mark of $803 million. In addition, the revenue figure increased 20% year over year. 5G and Cloud product ramp-ups, along with revenue contribution from the recently-acquired Inphi Corporation business, were major driving factors.

Quarter Details

In the end markets, storage revenues (36% of total revenues) grew 17% year over year to $302.9 million.

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote

The networking business (60%) revenues jumped 26% year on year to $498.3 million.

Other product revenues (4%) during the fiscal first quarter declined 24% on a year-over-year basis to $31.1 million.

Notably, total core business constituted 96% of total revenues and climbed 23% year over year to $801.2 million.

Marvell’s non-GAAP gross margin expanded 150 basis points (bps) to 64.3%. Non-GAAP operating expenses flared up 2.2% year over year to $306.3 million. Non-GAAP operating margin expanded 790 bps year on year to 27.5%.

Balance Sheet and Cash Flow

Marvell exited the reported quarter with cash and cash equivalents of $522.5 million compared with the previous quarter’s $748.5 million. The company’s long-term debt totaled $4.67 billion.

The firm uses $13.7 million of cash during the fiscal first quarter for operational activities. Marvell returned $40.5 million to shareholders through dividend payments during the quarter.

Q2 Guidance

Marvell expects a pause in 5G deployment in China and the ongoing supply constraint to adversely impact its fiscal second-quarter performance. However, accelerated 5G adoptions in the United States and other regions, along with broad growth across multiple products, are likely to more than offset the negative impact of the aforementioned factors.

The company projects fiscal second-quarter revenues of $1.065 billion (up or down up to 3%). The Zacks Consensus Estimate for revenues is pegged at $838.5 million, suggesting growth of 15.3% from the year-ago quarter.

Non-GAAP earnings per share are expected to be approximately 31 cents (+/- 3 cents). The consensus mark of 31 cents indicates a 47.6% year-over-year surge.

Zacks Rank & Stocks to Consider

Marvell currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Lam Research Corporation (LRCX - Free Report) , ASML Holding N.V. (ASML - Free Report) and Facebook (FB - Free Report) , all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Lam Research, ASML Holding, and Facebook is currently pegged at 32.8%, 29.8% and 20.1%, respectively.

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