Marvell Technology Inc. (MRVL) shares experienced a decline in after-hours trading following the company’s second-quarter earnings report. Despite beating Wall Street expectations, Marvell’s outlook for the future remained in line with predictions.
Earnings Overview
In the second quarter, Marvell reported a loss of $207.5 million, or 24 cents per share, in comparison to net income of $4.3 million, or one penny per share, during the same period last year. Adjusted earnings, which exclude stock-based compensation expenses and other items, amounted to 33 cents per share. This marks a decrease from the 57 cents per share reported in the previous year.
Additionally, Marvell saw a decline in revenue, which fell to $1.34 billion from $1.52 billion in the year-ago quarter.
Performance in Key Segments
Marvell’s data-center sales dropped by 29% to $459.8 million, failing to meet analyst expectations of $439.9 million. Similarly, carrier infrastructure sales amounted to $275.5 million, a 3% decrease compared to the anticipated $286.2 million. Enterprise networking sales also experienced a decline, falling by 4% to $327.7 million, slightly under the average estimate of $329.8 million.
Optimistic Outlook on Future Growth
Despite current challenges, Marvell remains optimistic about its future prospects. Matt Murphy, Marvell chairman and chief executive, stated that the company expects revenue growth to accelerate in the third quarter. This growth will primarily be driven by advancements in artificial intelligence and cloud infrastructure.
Looking ahead, Marvell anticipates adjusted earnings of 35 cents to 45 cents per share on revenue ranging from $1.33 billion to $1.47 billion for the third quarter. These figures differ slightly from analysts’ forecast of 40 cents per share on revenue of $1.39 billion.
Strong Year-to-Date Performance
Marvell shares have shown strong performance throughout the year, with a 55% increase year-to-date. In comparison, the PHLX Semiconductor Index (SOX) experienced a 37% gain, the S&P 500 (SPX) rose by 14%, and the tech-heavy Nasdaq Composite (COMP) surged by 29% during the same time period.