Marvell Almost Caught Up On Financial Filings

Jul. 3.07 | About: Marvell Technology (MRVL)

Marvell (NASDAQ:MRVL) Monday took a big step toward getting past its stock-option backdating saga, filing a pile of delayed financial filings. The company filed its delayed 10-K for its fiscal year ended January 2007, as well as 10-Qs for the second and third quarters of fiscal 2007 and an amended filing for the first quarter of 2007. Still to come: the 10-Q for the fiscal first quarter ended April 28.

The company’s shares are up sharply Tuesday on the news.

Marvell took a cumulative pre-tax non-cash charge of $327.4 million for periods through fiscal 2006 as a result of its stock-option probe. Marvell says it now expects to maintain its Nasdaq listing.

Craig Berger, an analyst with Wedbush Morgan, writes Tuesday morning that the fiscal 2007 results included gross margins and operating expenses that were a bit worse than expected.

Berger says Marvell’s orders are “inflecting higher,” driven by the ramp of the hard drive, WiFi, handset and printer businesses ahead of the holidays. He says strength at Research in Motion (RIMM) and Apple (NASDAQ:AAPL) (it makes the WiFi chip in the iPhone) may provide revenue tailwinds as well. But he also does not think weak guidance for the second quarter will lead to a revenue ’snap back’ in the third quarter.

Berger says consensus revenue and EPS estimates are “still too high, an ongoing investor risk.” He sees calendar 2008 EPS of 55 cents, well below the most recent consensus of 79 cents. “In short, apart from a seasonal ramp in revenues, it is difficult for us to get constructive on MRVL with the stock trading at 33x our forward pro forma EPS estimate,” he writes. “Shares of MRVL are expensive, in our view.”

Berger cut his price target to $15 from $16.

Marvell Tuesday is up 57 cents at $18.65.

MRVL 1-yr chart:
mrvl july 07