Technology stock

Why Marvell Technology Stock Jumped Today

What happened

Shares of Marvell Technology (NASDAQ:MRVL) surged on Friday after the chipmaker reported better-than-expected third-quarter fiscal 2022 results.

As of 3:20 p.m. ET, Marvell stock price was up more than 17%.

So what

Marvell’s net revenue jumped 61% year-over-year to $1.2 billion. The semiconductor company experienced strong growth in its five main business segments. Revenues from Marvell’s data centers and automotive/industrial divisions more than doubled, while sales from its enterprise networking, carrier infrastructure and consumer segments grew 56%, 28% and 20 %, respectively.

Image source: Getty Images.

Notably, Marvell has successfully overcome global supply chain bottlenecks at a time when many of its competitors are struggling to obtain the raw materials they need for their manufacturing operations.

During a conference call with analysts, CEO Matt Murphy said:

Our operations team continues to do a great job in supplemental provisioning, and we are starting to see the fruits of their labor. Supply was better than expected in the third quarter, and we expect continued improvements as we enter the fourth quarter and into next year. The additional capacity has better positioned us to catch up with demand growth, which so far has outpaced increases in supply.

This operational success was reflected in the company’s financial statements. Marvell’s adjusted gross margin improved to 65.1% from 63% in the third quarter of fiscal 2021. Its adjusted net income, in turn, climbed 116% to $364 million, or $0.43 per share. That was well above Wall Street estimates for adjusted earnings per share of $0.39.

Now what

For the fourth quarter, management expects:

  • Net income of approximately $1.3 billion, an increase of 63%
  • Adjusted gross margin of around 65%
  • Adjusted earnings per share from $0.45 to $0.51

Looking further ahead, Murphy sees a bright future for the semiconductor leader.

“While we have delivered strong results for several quarters, we are confident that we are still in the early stages of a period of sustained strong growth for Marvell, and we look forward to reaping the rewards of the investments we have made in our business over the past few years,” he said.

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