- Jefferies notes Marvell reported CQ4 revenue slightly below and provided guidance below consensus as was widely expected. Despite another downward revision to St. estimates, the firm is maintaining their Buy rating as they see this as the last downward revision and believe investors will focus on the potential leverage in CY08.
Firm estimates CQ4 EPS was $0.06 (vs. St of $0.08) and are modeling CQ1 EPS of $0.07 (vs. St of $0.10), largely due to higher opex assumption. CY07 and CY08 EPS estimates are largely unchanged at $0.47 and $0.75, respectively (vs. St of $0.61 and $0.96). Jeffco expects St. estimates to be reduced closer to their estimates today, followed by additional revisions once Marvell makes its filings, which they estimate will be in the late March/early April time frame.
- CIBC says Marvell reported abridged F4Q07 results (January) with revenue roughly in-
line with expectations. The core business grew just modestly as demand trends stabilized. The Intel acquisition adds revenue while diluting profitability as expected. Inventory issues in storage and 802.11n are largely resolved and these businesses should resume more normalized growth in CY07. PC Ethernet is soft ahead of an anti-climactic Vista launch, though GigE switching and printing ASICs remain strong on robust enterprise demand.
Guidance for 3%-5% growth was encouraging against weak cyclical and seasonal conditions. Firm's estimates are coming down, though they believe this is likely the last numbers cut as demand improves. There remain many opportunities for upside in Marvell's diversifying business. They believe the runway is now clear for better growth and profitability in 2007. HDD should provide more stable profitability, while a full plate of growth including Ethernet switching, handset, wireless LAN, optical storage, printers, and enterprise storage solidifies. Maintains Sector Outperformer rating.
- Goldman Sachs maintains their Buy as they expect several positive drivers to ramp in the coming quarters, which they believe will help re-establish positive earnings momentum and investor sentiment. However, the firm expects near-term trading will remain choppy as fundamentals are weak and visibility into cost improvement of the acquired business is limited. Hence, they believe investors should build long-term positions with tight stop-loss or half positions now with full positions filled as overhangs such as cyclical choppiness and the options investigation are resolved.
- Merrill Lynch notes MRVL reported revenues of $622mn (+20% Q/Q), which was near the low-end of management's outlook for $620-630mn. The company's Apr-07Q outlook for
$640-650mn, or up 3-5%, was a bit below consensus of $650mn. Mostly inline results and optimism about normalizing channel inventory appeared to have helped to the stock in the after market. At this point, the firm thinks downward estimate revisions are more or less behind us but see potential headwinds for MRVL's XScale and storage businesses on the horizon.
Notablecalls: The stock ended up about $1 in after market action. I don't see any targets raised (most stand around $23) as estimates get trimmed at several firms. Must say I find it difficult to see any major upside from levels reached in after market.