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Dec. 8, 2015, 11:36 AM
- Marvell (MRVL -5.9%) is adding to the moderate losses seen yesterday after the company pre-announced below-consensus FQ3 sales and EPS (soft hard drive controller demand weighed), and forecast its mobile phone-related sales will drop through FY17 (ends Jan. '17) thanks to Marvell's restructuring of its mobile baseband modem ops.
- Possibly weighing: Marvell has also disclosed the SEC and U.S. Attorney's Office (DOJ) are probing the company on account of its recent Audit Committee probe into accounting and governance issues. Marvell says it's cooperating with the inquiries.
- Cowen's Tim Arcuri (Outperform, $12 target) defended Marvell yesterday afternoon. "Consistent w/our note from last week, revenue was slightly light but results appear more consistent w/storage end markets when adjusting for July/Oct pull-ins. FQ4:15 is now also part of the investigation and external authorities have made inquiries. We see this all ultimately leading to management shakeup and ultimate break-up of the company, an event that could drive ~2x upside for the stock."
- Update: Also possibly weighing on Marvell: JPMorgan and Credit Suisse have each cut their targets to $9, while reiterating Neutral ratings.
Dec. 7, 2015, 9:19 AM| Dec. 7, 2015, 9:19 AM | 244 Comments
Dec. 7, 2015, 8:47 AM
- The company sees FQ3 EPS of $0.05 per share vs. expectations of $0.13. Revenue is seen at $674M, down from $711M a quarter earlier.
- Storage revenue fell 16% sequentially during the quarter, says the company, reflecting lower demand from HDD customers, but was offset by slightly better-than-hoped SSD controller sales. Networking revenue fell 8%, and mobile and wireless revenue gained 15%.
- Source: Press Release
- MRVL is expected to open for trade again at 9 ET.
Dec. 1, 2015, 10:55 AM
- Cowen has hiked its Marvell (NASDAQ:MRVL) target by $0.50 to $12, while reiterating an Outperform. The vote of confidence comes as the chipmaker continues an accounting review that has weighed heavily on shares, and five weeks after auditor PwC resigned.
- Also: A vague rumor has surfaced that Sony (not known for aggressive chip M&A activity) is looking to buy a stake in Marvell. Marvell supplies a networking ASIC and Wi-Fi controller IC for the PS4.
- Marvell hasn't yet released FQ3 (October quarter) results. Last month, the company said it would release "preliminary" FQ3 numbers by early December.
Oct. 27, 2015, 9:17 AM
Oct. 26, 2015, 5:37 PM
Oct. 26, 2015, 5:32 PM
- PricewaterhouseCoopers has resigned as Marvell's (NASDAQ:MRVL) independent registered accounting firm. Marvell adds its Audit Committee didn't "request, recommend, or approve" PwC's resignation.
- Marvell: "PwC has advised the Company that it would need to expand the scope of the 2016 audit in the following areas: (1) the Company's entity level controls, including whether senior management's operating style resulted in an open flow of information and communication to set an appropriate tone for an effective control environment, (2) the Company's process and controls over establishment of significant and judgmental reserves, including reserves for litigation and royalties, (3) the Company's process and controls over identification, communication and approval of related party transactions, including assignment of intellectual property rights and (4) the adequacy of financial reporting resources, including sufficient personnel with appropriate knowledge, expertise and training commensurate with the Company's corporate structure and financial reporting requirements. Due to its resignation, PwC did not undertake to expand the scope of the audit."
- The news comes less than two months after Marvell disclosed an Audit Committee probe into revenue recognition issues and management's operating style, and less then three weeks after interim CFO Sukhi Nagesh was reassigned.
- Shares have plunged to $8.00 after hours.
Oct. 12, 2015, 10:47 AM
- Citing uncertainty amid the company's CFO search, Nomura's Sanjay Chaurasia has downgraded Marvell (NASDAQ:MRVL) to Neutral, and cut his target by $2 to $12.
- The downgrade comes after Marvell (still conducting an accounting probe) disclosed interim CFO Sukhi Nagesh has been moved over to an SVP-level position, and a search has begun for a permanent CFO.
- Shares are once more within a dollar of a 52-week low of $8.21. They're down 36% YTD.
Oct. 6, 2015, 1:54 PM
- Marvell (MRVL +3%) and Exar (EXAR +4.2%) are rallying after Skyworks announced a $2B deal to buy PMC-Sierra. Marvell competes against PMC in the storage controller IC and network processor markets; Exar does so in the telecom IC market.
- Marvell has already been the subject of some M&A rumors as the chip industry continues consolidating. Light Reading reported in July Avago is thinking of buying Marvell after digesting (Marvell rival) Broadcom. The company's recent decision to launch major job cuts at its money-losing mobile baseband chip unit could make it more appealing to a would-be suitor.
Sep. 25, 2015, 11:13 AM
- "Mobile restructuring removed a substantial drag," says Nomura's Sanjay Chaurasia, reiterating a Buy, though cutting the price target to $14 from $16. "Due to lack of a clear growth strategy post-exit, we see Marvell (MRVL +2%) as under pressure to pursue a path of inorganic growth or to consider additional alternatives."
- Reiterating a Market Perform while boosting the price target to $11 from $9, FBR's Chris Rolland was most surprised last night's announcement didn't include a buyer for the group, given all the recent talks about a potential deal.
- In other sell-side action, RBC Capital lifts its PT to $10 from $9, Cowen remains a bull on the stock, and Piper Jaffray and Susquehanna are still neutral.
- Previously: Marvell Technology soars on mobile platform shakeup (Sept. 24)
Sep. 24, 2015, 5:37 PM
Sep. 24, 2015, 4:31 PM
- The restructuring of the mobile business - which includes a 17% cut in headcount - is expected to save $170M-$200M annually.
- The work will begin immediately, and most of the activity will take place through the end of this fiscal year. The company expects to incur charges of $100M-$130M.
- Marvell's (NASDAQ:MRVL) mobile unit earned about $13M on revenue of $122M in the first half of fiscal 2016.
- Shares +8.6% after hours
Sep. 14, 2015, 1:29 PM
- Morgan Stanley's Joseph Moore has downgraded Marvell (MRVL -3.1%) to Equal Weight three days after the company disclosed an accounting probe related to internal controls and FQ2 revenue recognition, and reported FQ2 sales of $711M (below a $722M consensus). Brean and Susquehanna downgraded to neutral ratings on Friday.
- Moore: "We knew this was a turnaround requiring patience, and were prepared for business to be difficult in light of ongoing weakness in PCs, but the accounting shortcomings are surprising and concerning" He notes the disclosure suggests Marvell has been boosting quarterly sales by pulling them forward a quarter, and expects its audit committee to put more conservative policies in place. "Combined with weaker industry demand, this implies heightened earnings uncertainty and risk for MRVL. Further, we see risk of incremental negatives such as shareholder lawsuits and SEC action."
- Susquehanna's Chris Caso: "We consider the stock to be unownable during such an investigation, and it will likely take a considerable amount of time for investors to regain confidence in management ... Our thesis on the stock had assumed value in MRVL if it were to spin or exit its handset related business, and focus on the core high cash flow business. Management unfortunately hasn’t acted to unlock that value..."
- Brean's Mike Burton: "We believe that in addition to the market weakness in PCs and Mobile, that Marvell’s businesses have been under competitive pressure. The PC market, which Marvell called out in its preliminary report as a reason for an additional 7-8% cut in numbers, is facing significant headwinds as HDDs are seeing increasing competition from SSDs and MRVL is facing more competition in SSDs. "
- Shares are down 19% since Marvell's disclosure.
Sep. 11, 2015, 12:44 PM
Sep. 11, 2015, 9:11 AM
Sep. 11, 2015, 8:25 AM
- Releasing preliminary FQ2 results, Marvell Technology (NASDAQ:MRVL) says its Audit Committee is investigating certain revenue recognition issues this past quarter, and whether management's style resulted in an open flow of information and communication to create an effective control environment.
- The focus is on about 7-8% of revenue recognized in FQ2 that would have been received and earned in FQ3, but is now no longer available for receipt this quarter. This percentage would be indicative of softening demand for certain company products, particularly in the storage end market.
- As a result of the probe, the company will be late in filing its 10-Q.
- As for preliminary results, FQ2 revenue of $711.3M vs. $961.5M a year ago. Operating loss of $400M vs. profit of $120.4M a year ago. GAAP loss per share of $0.74 vs. income of $0.27 a year ago.
- Shares -13.75% premarket
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