Marvell (MRVL) to Report Q3 Earnings: What's in the Offing?

Marvell Technology Group Ltd. MRVL is slated to report third-quarter fiscal 2022 results on Dec 2.

The company anticipates revenues of $1.145 billion (up or down up to 3%) for the fiscal third quarter. The Zacks Consensus Estimate for revenues is pegged at $1.15 billion, suggesting growth of 53% from the year-ago period.

Marvell expects non-GAAP earnings per share to be approximately 38 cents (+/- 3 cents). The Zacks consensus mark of 38 cents is in line with Marvell’s forecast. The figure indicates a 52% increase year over year.

Marvell surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.3%.

Marvell Technology, Inc. Price and EPS Surprise

Marvell Technology, Inc. price-eps-surprise | Marvell Technology, Inc. Quote

Factors to Note

Marvell’s third-quarter performance is likely to have benefited from solid demand for its networking products, primarily across the data-center and 5G infrastructure end markets.

During its second-quarter conference call, Marvell stated that it anticipates strong sequential revenue growth driven by the substantial contribution from cloud data-center end market, accelerated 5G adoptions in the United States and other regions, and broad growth across multiple products.

Marvell expects sequential revenue growth from the carrier end market to be driven by strong growth from wireless, partially offset by a decline from wired. It projects 20% year-over-year growth from this end market.

Additionally, 5G and Cloud product ramp-ups, and revenue contributions from the recently-acquired Inphi Corporation business might have favored Marvell’s networking segment performance during the quarter under review. The consensus mark for networking revenues is pegged at $759 million, suggesting a jump of approximately 71% year over year.

Record bookings and ramp-up of multiple Ethernet design wins in upcoming vehicles are anticipated to have driven revenue growth significantly in the fiscal third quarter. The automotive and industrial businesses are likely to have put up an impressive show in the quarter under review.

Marvell estimates its non-GAAP gross margin to be 64-65% in the fiscal third quarter. Its non-GAAP operating expenses are estimated between $365 and $370.

The company’s Storage business is expected to display year-over-year growth in the mid-teen range for the fiscal third quarter. The Zacks Consensus Estimate for storage business revenues is pegged at $373 million, indicating an improvement from the year-ago quarter’s $276 million.

During its last quarterly conference call, Marvell noted that beginning from the third quarter it will discontinue reporting revenues on product group basis. Instead, the company will categorize revenues on an end-market basis enabling better transparency of key business growth drivers.

However, certain ongoing supply-chain challenges are anticipated to have acted as headwinds, which in turn might have curbed Marvell’s ability to fully meet the increase in demand for some of its networking offerings.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Marvell this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Marvell currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Lululemon Athletica LULU, Snowflake SNOW and Bank of Nova Scotia BNS have the right combination of elements to post an earnings beat in their upcoming releases.

Lululemon is set to report third-quarter fiscal 2022 results on Dec 9. The stock has a Zacks Rank #2 and an Earnings ESP of +1.44%. Lululemon’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.2%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.39 per share, suggesting year-over-year improvement of 19.8%. LULU’s quarterly revenues are estimated to increase 28.1% year over year to $1.43 billion.

Snowflake has a Zacks Rank #3 and an Earnings ESP of +1.82%. The company is scheduled to report third-quarter fiscal 2022 results on Dec 1. SNOW’s earnings have surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average negative surprise being 2.5%.

The Zacks Consensus Estimate for Snowflake’s third-quarter bottom line is pegged at a loss of 6 cents per share, suggesting an improvement from the year-ago quarter’s loss of 28 cents. The consensus mark for revenues stands at $304 million, suggesting year-over-year growth of 90.5%.

Bank of Nova Scotia has a Zacks Rank #3 and an Earnings ESP of +1.48%. The company is scheduled to report fourth-quarter 2021 results on Nov 30. BNS’ earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.9%.

The Zacks Consensus Estimate for Bank of Nova Scotia’s fourth-quarter bottom line is pegged at $1.52 earnings per share, indicating year-over-year improvement of 38.2%. The consensus mark for revenues stands at $6.24 billion, suggesting year-over-year growth of 9.9%.

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Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report

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