SAN FRANCISCO—Chip vendor Marvell Technology Group Ltd. Thursday (Aug. 16) reported sales for the quarter ended July 28 that came up short of analysts' expectations. Company executives, who cited macroeconomic sluggishness and lower demand for its smartphone chips from major customers, also provided a sales target for the current quarter that disappointed analysts.
"Our business was impacted by the slowing macroeconomic environment starting in the middle of the quarter," said Sehat Sutardja, Marvell's chairman, president and CEO, in a conference call with analysts following the company's quarterly report.
Sutardja said Marvell's fiscal second quarter sales were also hurt by lower chip demand from North American and Chinese smartphone vendors and by slowing PC sales.
"While we faced unexpected demand headwinds in Q2, we continued to deliver growth in our storage and networking end markets through share gains and new product ramps," Sutardja said.
Marvell (Santa Clara, Calif.) reported sales of $816 million for its fiscal second quarter, up 2 percent compared with the previous quarter and up 9 percent compared with the year-ago quarter. Marvell reported a net income in accordance with generally accepted accounting principles (GAAP) or $95 million, or 16 cents per share, down 2 percent from the previous quarter and down 52 percent compared to the year-ago quarter.
On a non-GAAP basis, excluding charges, Marvell reported a net income of $142 million, or 24 cents per share, up 2 percent from the previous quarter and up 39 percent from the year-ago quarter.
Marvell's results came in below consensus analysts' expectations, which called for sales of $852.7 million and non-GAAP earnings of 26 cents per share, according to Yahoo Finance.
For its fiscal third quarter, which closes in October, Marvell said it expects sales to be between $800 million and $825 million, well below consensus analysts' expectations of about $914 million. Clyde Hosein, Marvell's chief financial officer, noted that the midpoint of the company's fiscal third quarter sales target represents growth of only 1 percent sequentially.
"This growth rate is well below what is our typical historical seasonality and has been due to the combination of a poor macro environment and cellular customer declines, Hosein said. "Our forecast largely reflects our customers' view of near term flatish demand environment."