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Chipmaker Marvell estimates revenue below analysts expectations

A Marvell Technology Group Ltd. flag flies outside the company's headquarters building in Santa Clara, California.
David Paul Morris | Bloomberg | Getty Images
A Marvell Technology Group Ltd. flag flies outside the company's headquarters building in Santa Clara, California.

Chipmaker Marvell Technology estimated third-quarter revenue below analysts' estimates, hurt by weak demand for its chips used in hard-disk drives.

Shares of the Hamilton, Bermuda-based company fell 10 percent to $8.30 in premarket trading on Monday.

Marvell estimated revenue of $674.1 million for the third quarter ended Oct. 31, a 27.5 percent fall from a year earlier.

Analysts on average were expecting revenue of $729.2 million, according to Thomson Reuters I/B/E/S.

Marvell said it expected a net loss of $61.7 million, or 12 cents per share, compared with earnings of $115.3 million, or 22 cents per share.

Excluding litigation reserves of $395 million and other charges, the company earned 12 cents per share. Analysts had expected earnings of 13 cents.

Marvell on Sept. 11 disclosed an accounting probe that led to the sharpest drop in the stock in 14 years.

The company said an investigation by its audit committee is ongoing and it has been contacted by the Securities and Exchange Commission and the U.S. Attorney's Office regarding the probe.

Up to Thursday's close, the stock had lost about a third of its value this year.