Marvell Technology Group (MRVL) is expected to report Q4 earnings after the market close on Thursday, March 4 with a conference call scheduled for 4:45 pm ET.
The consensus estimate is 37c for EPS and $841.82M for revenue, according to First Call. Guidance provided by management on the last earnings call is for Q4 EPS of 33c-39c on $820M-$850M in revenue.
Credit Suisse's Q4 estimates of 36c on $835M in revenue are in-line with guidance and Street estimates. The firm believes Marvell can deliver upside to their estimates driven by a stronger rebound in Networking, which is 21% of revenues, and which was guided up mid-high single digits percent quarter-over-quarter. Marvell's peers have reported 18% q/q CQ4 growth for Networking. Another reason for the upside could be that CQ4 HDD industry units are up 19% q/q vs. Credit Suisse's 6% estimate for Marvell Q4 HDD revenues. Lastly, better than expected Wireless results, which is 27% of revenues, could beat Marvell’s guidance for mid-to-high single digits decline. Marvell's peers have reported only a 1% q/q Wireless decline. Credit Suisse estimates a possible 2c-4c upside to their 36c estimate. Looking ahead to Q1: Credit Suisse is modeling 29c on $780M, down 7% q/q, vs. consensus of 32c on $797.73M in revenue. While management may guide conservatively, Credit Suisse believes upside to their estimates could come from continued momentum in Networking and HDD unit strength. Competitors Western Digital (WDC) and Segate (STX) have guided to flat/down 5% HDD units in CQ1 vs. Credit Suisse's estimate of down 7% for Marvell HDD revenues. Marvell is modeling 150bps q/q GM erosion from Q4's peak of 58.2% based on volume and mix.