Marvell's Quarterly Profit Drops Sharply
July 19 2016 - 6:50PM
Dow Jones News
Marvell Technology Group Ltd., under federal investigation over
accounting practices and other issues, on Tuesday reported a sharp
drop in profit for its fourth quarter and posted an $811 million
annual loss.
The Silicon Valley chip maker last reported an annual loss in
January 2008.
Marvell, which had previously said a patent-dispute settlement
with Carnegie Mellon University would drag results for the year
ended Jan. 30, on Tuesday said the $750 million was paid in the
first quarter of the current year but recorded $655 million under
operating expenses for the year.
Marvell had said an internal probe found accounting problems
largely tied to when revenue was recognized, blaming what it called
"tone at the top" issues, including management pressure to meet
revenue targets. The company said it hadn't found evidence of
fraud.
Its external accounting firm, PricewaterhouseCoopers LLP,
resigned in October. In February, Marvell hired Deloitte &
Touche LLP.
In April, it ousted the husband-and-wife team that had led the
company for two decades and has since appointed new leadership.
The company is still searching for a chief financial officer and
chief accounting officer.
Over all, Marvell reported fourth-quarter profit of $4.2
million, or a penny a share, down from $81.7 million, or 16 cents a
share, a year earlier. Excluding stock-based compensation and other
items, profit fell to 11 cents a share from 25 cents a year
earlier.
Revenue fell 28% to $616.2 million.
Analysts surveyed by Thomson Reuters had projected 9 cents a
share on $652.7 million.
Gross profit margin narrowed to 50.9% from 51.4% a year
earlier.
Shares, up 12% this year, fell 0.6% to $9.79 in after-hours
trading.
Write to Maria Armental at maria.armental@wsj.com
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 19, 2016 18:35 ET (22:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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