Today, 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.
Mon, Sep. 28, 8:34 AM
Fri, Sep. 25, 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)
Thu, Sep. 24, 5:37 PM
Thu, Sep. 24, 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.
- Source: Press Release
- Shares +8.6% after hours
Mon, Sep. 14, 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.
Fri, Sep. 11, 12:44 PM
Fri, Sep. 11, 9:11 AM
Fri, Sep. 11, 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
Tue, Sep. 8, 1:19 PM
- Though the Philadelphia Semi Index is up 3.4% on a good day for equities, Marvell (MRVL -0.4%) is off slightly following a downgrade to Neutral from JPMorgan.
- The firm observes Marvell's revenue growth has underperformed the chip industry's in recent quarters. It's also uncertain about management's willingness to abandon its unprofitable mobile baseband processor unit, and is worried about "potential growth headwinds" for Marvell's storage (hard drive/SSD controller) and networking chip businesses.
- Marvell is 3 weeks removed from postponing its FQ2 report to give itself more time to finalize its numbers. No make-up date has yet been announced.
Wed, Sep. 2, 5:35 PM
Wed, Aug. 26, 5:35 PM
Thu, Aug. 20, 9:21 AM| Thu, Aug. 20, 9:21 AM | 2 Comments
Wed, Aug. 19, 5:35 PM
Thu, Aug. 6, 9:53 AM
- Qualcomm (QCOM -0.5%), via its Atheros Wi-Fi/connectivity chip unit, is buying DSL modem/infrastructure IC and home gateway processor vendor Ikanos (NASDAQ:IKAN) for $2.75/share, or roughly $47M based on Ikanos' Q2 diluted share count. The price represents a 57% premium to Ikanos' Wednesday close. The deal is expected to close by year's end.
- Ikanos' products complement Qualcomm/Atheros home Wi-Fi and wireline networking offerings. Qualcomm: "The combination of Qualcomm Atheros' broad home gateway IP portfolio, including Wi-Fi, powerline, small cell, and Ethernet switch technologies, and Ikanos' advanced wired modem technology, is designed to create a complete solution for a wide range of home gateway products to better serve the carrier segment." Broadcom (NASDAQ:BRCM) and Marvell (NASDAQ:MRVL) are among the other companies competing in this space.
- Qualcomm CEO Steve Mollenkopf suggested last week his company would make new chip acquisitions.
Wed, Aug. 5, 11:22 AM
- Citi has upgraded Marvell (NASDAQ:MRVL) to Neutral a day after a federal appeals court (the CAFC) cut the infringement award levied against the company in a Carnegie Mellon suit to $278M from $1.54B. The firm had launched coverage at Sell in late May, calling the company a value trap.
- The CAFC agreed Marvell infringed CMU's patents, as well as a Pennsylvania jury's ruling that Marvell owed $0.50 for each infringing hard drive controller chip sold in the U.S. However, it threw out a 23% enhanced damages increase to the original jury award, and stated a new trial is needed to decide if royalties are owed on chips that never enter the U.S. Many tech companies are pleased with the latter decision.
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