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Marvell Tech Beats by a Penny

The semiconductor company's board also approves a 2-for-1 stock split.

Updated from 4:31 p.m. EST

Marvell Technology


boosted its profit 77% in its fiscal fourth quarter, and raised its revenue expectations for the current year above Wall Street estimates.

The Santa Clara, Calif.-based chipmaker also bumped up its long-term profit margin targets when it reported its financial results after the bell Thursday.

After initially declining in recent extended trading, shares of Marvell rebounded 4.8%, or $3.02, to $65.85; the stock closed the regular session at $62.83.

In the three months ended Jan. 28, Marvell said it earned $97.5 million, or 30 cents a share, on revenue of $489 million. In the year-ago period, the company earned $54.9 million.

Excluding certain acquisition-related charges and amortization of stock-based compensation, Marvell reported EPS of 42 cents for its fiscal fourth quarter.

On that basis, analysts polled by Thomson First Call were looking for the company to earn 41 cents on revenue of $485.8 million -- the midpoint of Marvell's top-line guidance.

Marvell, which sells digital and mixed-signal processing chips, is benefiting from corporate spending on high-speed networking and storage equipment as well as from the advent of new consumer-electronic devices that integrate wireless networking capabilities and high-capacity storage.

"We continue to enjoy strength both form our established position in enterprise and our emerging position in the consumer market," said CEO Sehat Sutardja in a conference call with analysts after the release of the results.

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The company said it anticipates that its fiscal 2007 revenue will range between $2.25 billion and $2.3 billion, with the midpoint representing a 36% annual growth rate. Analysts polled by Thomson First Call had pegged the company's revenue for the 2007 fiscal year at $2.2 billion.

And although Marvell said the current quarter typically entails some seasonal slowness, it expects revenue to rise 5% to 6% sequentially, also above analysts' expectations.

The company cited among the big growth drivers for the current year its embedded wireless networking chips, which Marvell is selling into an expanding roster of products that range from cell phones to printers and digital cameras.

Marvell also plans to unveil its own retail wireless networking PC card this year based on the new 802.11n standard.

Company officials stated that Marvell intends to make more acquisitions in the future, as it strives to develop new revenue by adding capabilities to its products. On Tuesday, the company announced

the $240 million acquisition of

Avago Technologies'

printer-semiconductor business.

Marvell also announced that its board has approved a 2-for-1 stock split, subject to shareholder approval. The company's stock has surged nearly 40% since the beginning of November.

Gross margins in the quarter were 54.9%. The company announced that it was raising the long-term, gross-margin targets in its business model to 53% from the previous range of 51% to 52%.

Marvell also reaffirmed its goal of achieving a 50-50 split in overall revenue between business and consumer sales by the end of the calendar 2007 year. In the fourth quarter, business sales represented about 70% of Marvell's total revenue.

For the full 2006 fiscal year, Marvell reported $1.67 billion in sales, a 36.4% increase from the prior year's $1.22 billion.