Marvell Earnings Beat Expectations. Here’s What to Know.

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Courtesy Marvell

Bolstered by its recent acquisition of Inphi, semiconductor maker

Marvell Technology

topped analyst expectations when it reported fiscal first-quarter earnings late Monday. The company issued a bullish forecast for its second quarter, telling investors that strong demand persists across all of the company’s important markets.

Marvell (ticker: MRVL) shares advanced 5% in the extended session after closing down 0.9% to $48.27 during regular trading.

The infrastructure semiconductor maker reported a fiscal first-quarter net loss of $88.24 million, which amounts to 13 cents a share, compared with a net loss of $113.03 million, or 17 cents a share, a year ago. Adjusted for stock-based compensation, and amortization of intangible assets, among other things, earnings were 29 cents a share. Revenue grew 20% to $832.3 million from a year ago.

Analysts had expected adjusted earnings of 27 cents a share, on revenue of $805.4 million.

In the fiscal first quarter, which ended May 1, Marvell closed its $10 billion acquisition of optical networking equipment maker Inphi. The deal closed roughly 10 days ahead of the first quarter’s close, and Marvell disclosed revenue of $810.5 million without Inphi’s contribution, citing the fact that its previous guidance didn’t include the effects of the acquisition. Without Inphi, Marvell disclosed first-quarter earnings of 29 cents a share.

“The acquisition of Inphi increases and accelerates our growth opportunity in the data center, Marvell’s largest end market by revenue,” Marvell chief executive
Matt Murphy
said. “Marvell’s outlook for strong revenue growth in the second quarter highlights robust demand across all our key end markets.”

Marvell said it expected adjusted fiscal second-quarter earnings of roughly 31 cents a share, on revenue of about $1.07 billion. Analysts had forecast adjusted earnings of 30 cents on revenue of $917.8 million.

In the conference call late Monday, Murphy addressed the chip shortage that has hampered the manufacturing of a swath of consumer goods ranging from automobiles to videogame consoles. In Marvell’s case, Murphy said that the company has secured enough chips to continue to grow its revenue, but that demand continues to outstrip the company’s ability to meet it.

“We believe we have a line of sight to supply improvements later this year and next year to support our growth plans,” Murphy said.

Marvell announced its intent to acquire Inphi late last year amid a wave of consolidation in the semiconductor industry. At the time Murphy told Barron’s that scale was vital to the company’s long-term prospects and increasingly necessary in the sector. Murphy said at the time that he planned to integrate Inphi into Marvell and looked at the deal as a merger, adding that he didn’t plan to handle Inphi as a subsidiary.

Shares of Marvell have gained 1.5% this year, as the

PHLX Semiconductor index,

or Sox, rose 14%. The benchmark

S&P 500 index

gained 13%.

Write to Max A. Cherney at max.cherney@barrons.com