Marvell Technology (NASDAQ: MRVL) witnessed a significant 12% decline in its share price during extended trading on Thursday following the release of its first-quarter guidance, which fell short of expectations.
Looking forward, Marvell anticipates generating revenue of $1.15 billion, with a margin of error of plus or minus 5%, for the first quarter. This projection contrasts with analysts’ expectations of sales reaching $1.37 billion. Additionally, Marvell forecasts adjusted gross margins to range between 62% and 63%, with adjusted earnings expected to be in the range of $0.18 to $0.28 per share.
Matt Murphy, Marvell’s Chairman and CEO, noted, “In the first quarter of fiscal 2025, we expect continued sequential growth in our data center revenue with initial shipments of our cloud optimized silicon programs for AI complementing our electro-optics franchise.” He further stated, “While we are forecasting soft demand impacting consumer, carrier infrastructure, and enterprise networking in the near term, we expect revenue declines in these end markets to be behind us after the first quarter, and project a recovery in the second half of the fiscal year.”
This weaker-than-expected guidance follows Marvell’s previous earnings report, where the company, specializing in application-specific integrated circuits, reported an adjusted earning of $0.46 per share on revenue of $1.43 billion. Analysts had anticipated earnings of $0.46 per share on revenue of $1.42 billion, as per consensus estimates.
Furthermore, Marvell’s board of directors announced a $3 billion stock buyback program.
To delve deeper into these results, the company will host a conference call at 4:30 p.m. EST.