Ahead of the Bell: Marvell Tech falls on outlook
NEW YORK -- Marvell Technology Group Ltd.'s stock tumbled nearly 10 percent in premarket trading Friday after the computer chip maker cut its fiscal third-quarter revenue forecast, citing weakness in the personal computer market, and said its chief financial officer resigned.
After the market closed Thursday, the Santa Clara, Calif. company lowered its quarterly revenue guidance to a range of $765 million to $785 million. It previously predicted $800 million to $850 million.
Analysts polled by FactSet were expecting revenue of $815.1 million.
Mark Lipacis of Jefferies is among a slew of analysts who downgraded the stock in response to the news. He lowered his rating to "Hold" from "Buy" and cut his price target to $9 from $15. The analyst said he sees few positive catalysts for the company before the middle of next year, when it ramps its TDS-CDMA solutions.
Benchmark's Gary Mobley said in a client note that the revised outlook should not come as a surprise, as Marvel Technology's hard disk drive sales continue to be weak and mobile and wireless sales are declining.
Marvell Technology also said CFO Clyde Hosein resigned to pursue other opportunities. Corporate Controller Brad Feller will serve as interim CFO.
Glen Yeung of Citi Investment Research said that Hosein's exit will likely raise concern among investors, but that "Marvell has indicated there has been no impropriety and anticipates no change to financial policy."
He lowered the company's price target to $9.50 from $11.50
Both Mobley and Yeung maintained "Hold" ratings.
Shares of Marvell Technology slid 87 cents, or 9.9 percent, to $7.96 before the market open. The stock has traded between $8.67 and $16.86 in the past 52 weeks, closing Thursday at $8.83, down more than 36 percent since the start of the year.