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Marvell Beats Despite Profit Plunge

Updated with information on new products and third-quarter guidance

SANTA CLARA, Calif. ( TheStreet) -- Chipmaker Marvell (MRVL - Get Report) 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 - Get Report), for example, recently posted strong second-quarter resutlts and has been attracting positive attention from analysts.

Marvell, which competes with LSI (LSI), ST Microelectronics (STM) and Texas Instruments (TXN), 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

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