Marvell Tech Tops Estimates - TheStreet

Marvell Tech Tops Estimates

The chipmaker swings to a cuarterly profit.
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Marvell Technology

(MRVL) - Get Report

swung to a profit in the first quarter, with sales beating analysts' expectations.

And the Santa Clara, Calif., chipmaker finally announced the appointment of a permanent finance chief, one year after its previous CFO exited amid an investigation into stock option backdating.

Shares of Marvell recently jumped 11% in after-hours trading to $15.63.

The Santa Clara, Calif., chipmaker said sales for the three months ended May 3 totaled $804 million, above its own forecast and the $783.6 million expected by analysts. At this time last year, Marvell had sales of $635.1 million.

Marvell earned $69.9 million in the first quarter, or 11 cents a share, vs. a net loss of $52.8 million, or negative 9 cents a share at this time last year.

Excluding stock compensation expenses as well as acquisition-related charges, Marvell said it earned 24 cents a share.

It was not immediately clear how that figure compared with the average analyst expectation, which called for Marvell to earn 13 cents a share excluding stock option expenses.

The chipmaker said demand for its processors for advanced cell phones was strong during the quarter, and that sales of hard-drive chips were flat sequentially, despite the normal seasonal declines in the market.

"We surpassed our revenue targets, despite an uncertain economic environment and continuing pricing pressures in our core markets," said CEO Sehat Sutardja in a statement.

Sutardja also credited cost-cutting efforts for helping Marvell pass its long term goal of a 50% gross margin. The chipmaker gross margin reached 51.6% in the first quarter, vs. 48.4% at this time last year.

The company did not provide a financial forecast for the current quarter, although a conference call was scheduled to follow Thursday's earnings release.

In a separate statement, Marvell said that Clyde Hosein will become permanent CFO on June 23, ending a tumultuous phase in which Marvell cycled through three interim CFOs.

Hosein was previously the CFO of Integrated Device Technologies, and spent 14 years at

IBM

(IBM) - Get Report

.

Marvell's last permanent CFO, George Hervey, left in May 2007 amid a stock option backdating investigation. Earlier this month, Marvell agreed to pay a $10 million fine to the SEC to settle backdating charges, without admitting or denying guilt.