Marvell Beats Despite Profit Plunge

Updated with information on new products and third-quarter guidance

SANTA CLARA, Calif. (TheStreet) -- Chipmaker Marvell(MRVL Quote) blew past analysts' estimates in its second-quarter results, despite taking a revenue and profit hit.

Marvell posted sales of $640.6 million, down 24% on the same period last year but well above analysts' estimate of $619.83 when it reported after market close.

The silicon specialist also grew its sales 23% sequentially, raising hopes that tech spending is on the rebound.

"We are pleased with the results," said Dr. Sehat Sutardja, Marvell's CEO, in a statement. "Our sequential revenue growth reflects an improving economy and the acceptance by customers of our new and existing products."

New products represented about 5% of Marvell's total revenue, said Sutardja, during a conference call to discuss the results, but predicted that this will reach 10% during the third quarter.

Excluding items, Marvell earned 18 cents on net income of $118.7 million, compared to 24 cents a share and net income of $154 million in the prior year's quarter. Analysts surveyed by Thomson Financial had expected earnings of 14 cents a share.

For the third quarter, Marvell expects revenue between $680 million and $730 million, well above analysts' estimate of $647.05 million. Excluding items, the chipmaker forecasts earnings between 18 cents and 26 cents a share, above Wall Street's 17 cent estimate.

Marvell has enjoyed an uptick in its stock during recent months, buoyed by increasing confidence in the semiconductor space.

Tech bellwether Intel(INTC Quote), for example, recently posted strong second-quarter resutlts and has been attracting positive attention from analysts.

Marvell, which competes with LSI(LSI Quote), ST Microelectronics(STM Quote) and Texas Instruments(TXN Quote), reported GAAP earnings of 9 cents a share on net income of $58.5 million, down from 11 cents a share and $71.4 million in the prior year's quarter.

The company's shares rose 42 cents, or 2.9%, to $15.05 in extended trading.

Written by James Rogers in New York