DOW JONES NEWSWIRES
Marvell Technology Group Ltd.'s (MRVL) fiscal fourth-quarter profit slumped 64% on weakness in the market for the chip maker's hard-drive components.
The latest decline extends a streak of lower earnings for Marvell over the past year, when broad economic uncertainty forced many electronics makers to cut back production, hurting semiconductor companies' top lines in the process. Floods in Thailand last year also knocked out much of the world's hard-disk drive production, which is responsible for about half of Marvell's sales.
At the same time, demand has been growing for Marvell's mobile-phone processors, especially in China, where wireless subscriptions are surging.
The company in December authorized an additional $500 million worth of stock buybacks to signal confidence in its future prospects.
Marvell boosted its portfolio of network gear last month when it acquired Sweden-based Xelerated AB, which provides network processing and Ethernet switching technology. Like rival Broadcom Corp. (BRCM), which recently closed its own networking-chip manufacturer, Marvell aims to take advantage of the growing demands consumers and buisinesses are placing on wireless networks.
The company also scored another design win by replacing Intel Corp. (INTC) as Google Inc.'s (GOOG) lead chip provider for televisions, though the Internet giant's first TV sets have failed to catch consumers' attention.
For the quarter ended Jan. 28, Marvell reported a profit of $80.7 million, or 13 cents a share, down from $222.9 million, or 33 cents a share, a year earlier. Excluding stock-based compensation, acquisition-related costs and other items, per-share earnings fell to 21 cents from 40 cents as revenue dropped 18% to $742.7 million.
The company in November said it expected earnings between 21 cents and 25 cents a share. Its lowered top-line view last month called for $735 million to $745 million in revenue.
Gross margin narrowed to 54.1% from 58.7%.
Shares were up fractionally at $16.18 after hours. The stock had climbed 16% so far this year through Thursday's close.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com