Marvell Technology Group Ltd.
) is set to report first-quarter fiscal 2015 results on May 22.
Last quarter, the company posted a positive earnings surprise of
22.2%. Let us see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Marvell delivered decent fourth-quarter results wherein both the
top and bottom lines came ahead of the Zacks Consensus Estimate.
Revenue contributions from the end markets were in line with
expectations and also increased on a year-over-year basis.
Improvement in revenues was primarily due to steady performance
from the storage and networking business, which more than offset
the seasonal decline in the wireless business.
The company expects mobile and wireless end markets to grow, driven
by a ramp up in its unified 3G platform for mobile and advanced
wireless connectivity solutions. Additionally, the strong demand
for Marvell's 4GLTE products could be the growth driver in the
forthcoming quarters. We also remain positive on Marvell's diverse
revenue base and stable balance sheet.
However, competition in the semiconductor market from major players
Texas Instruments Inc.
) remains a headwind. Moreover, sluggish macroeconomic conditions,
a shrinking PC market, the impending damage payment and higher
material costs are the other challenges in the near term.
Our proven model does not conclusively show that Marvell will beat
earnings this quarter. That is because a stock needs to have both a
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 15 cents. Hence, the difference is 0.00%.
Marvell carries a Zacks Rank #2 (Buy). Though Zacks Ranks #1, 2 or
3 increase the predictive power of ESP, the company's ESP of 0.00%
makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies, which you may consider as our model
shows that they have the right combination of elements to post an
earnings beat this quarter:
) has an Earnings ESP of +14.29% and holds a Zacks Rank #2
), Earnings ESP of +33.33% and a Zacks Rank #2
Best Buy Co., Inc.
), Earnings ESP of +5.00% and a Zacks Rank #3 (Hold)
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