Net revenue rose to $750.1 million during the three months that ended Oct. 31 from $727.3 million a year ago, according to a statement late Thursday. The average analyst sales forecast compiled by Capital IQ was $751 million. Adjusted earnings of $0.25 per share rose from $0.17 per share a year ago and were in line with market expectations.
Chief Executive Matt Murphy said revenue growth was "driven by the networking business," which reported a 35% surge in year-over-year sales. He added "strong 5G and cloud product ramps" were fueling growth in these strategic markets.
The networking business is facing supply constraints on some products, Murphy said during a call with analysts. "As a result, after a very strong third quarter, we expect networking revenue in the fourth quarter to be approximately flat on a sequential basis," he said. Year-on-year, the segment is expected to see revenue rise about 25%, he said.
Marvell's storage revenue fell 5% sequentially, in the third quarter, below expectations of flat, Murphy said. In the current three months, the company sees that segment rebounding with "sequential revenue growth in the low teens on a percentage basis," he said.
In fiscal fourth quarter, total sales are pegged in a range 5% above or below $785 million, compared with estimates of $785.4 million, according to data compiled by Capital IQ. Adjusted diluted earnings per share are seen between $0.25 and $0.33 in the final three months of the financial year, versus Street estimates of $0.29.
Marvell said its acquisition of Inphi (IPHI) is likely to close by the second half of next calendar year. In a note on Friday, Morgan Stanley raised its price target on Marvell by $2 to $42, with an equal-weight rating.
"We continue to hear enthusiasm from investors for the themes that Marvell participates in, principally in 5G infrastructure and cloud -- and the cloud exposure should be much more compelling post Inphi, so despite the high valuation and lack of upside, we do expect the narrative to keep a bid to the stock," analysts Joseph Moore and Craig Hettenbach said.
Price: 43.19, Change: -2.33, Percent Change: -5.12
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