It wasn't ground hog day. It's just the wrath of the trade war.

Marvell Technology (MRVL - Get Report) was the second sizable company to blame its poor outlook on the impact of U.S. China trade issues. Earlier this week, it was AutoDesk ADSK, a software services company said its weak guidance was a result of weakening spend on a macro level, partially because of tariffs.

Marvell Technology

"In our third quarter, we face a worsening macro environment along with the ongoing impact from the current restrictions on shipments to Huawei, offset by a stabilizing storage business and the earlier than expected first production shipments of our 5G solutions," said Matt Murphy, President and CEO of Marvell, on its second quarter earnings release.

Management guided for third quarter revenue of $660 million, plus or minus 3%, short of analyst consensus forecasts of $695 million, according to FactSet. Management also guided for adjusted EPS for the quarter of 15 cents to 19 cents, below analyst estimates for 21 cents.

Adjusted earnings per share for the second quarter of 2019 came in at 16 cents, beating Wall Street's estimates of 15 cents. Revenue was $657 million, beating analysts expectations of $650 million, and shrinking 1.2% year-over-year.

The stock, RealMoney's stock of the day, fell 3% to $23.45 Friday in premarket action.


"Our view of global economic conditions and their impact on our business has been updated to reflect the current state of various trade disputes and the geopolitical environment and their potential impact on our customers," said CEO Andrew Anagnost on the company's earnings call. He cited slowing manufacturing output in the EU, slowing growth in China as a result of its trade dispute with the U.S., and Brexit. Autdoesk sees a large portion of revenue from the EU and China.

AutoDesk sees more than 60% of its revenue from industrial and manufacturing companies.

Autodesk may have surpassed Wall Street's sales and earnings expectations for the second quarter of its fiscal year 2020, but management's guidance was weak. The company is looking for Annual recurring revenue (ARR) of between $3.425 billion and $3.485 Billion, a disappointment to analysts expectations of $3.49 billion. Autodesk forecasted adjusted earnings per share for the year of $2.69 to $2.81. The midpoint is $2.75, lagging the consensus figure of $2.76.

The stock is down more than 5% since before the earnings release.

Broader Market

These trade and macro concerns still pose risk to stocks.

When worries that the U.S. economy is closer to a recession than previously thought begins to impact investor sentiment, the market has sold off. The Dow Jones Industrial Average DJIA has had several days in which it sold off more than 500 points in August. 

But it gains back those losses. The Dow Jones is back up 14% year-to-date. The S&P 500 is back up 16.5% on the year. 

Stifel, UBS and LPL Financial are all warning stocks have more to lose than to gain right now. 

Marvell is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or MRVL? Learn more now.

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