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Marvell (MRVL) to Post Q2 Earnings: What's in the Offing?

Marvell Technology Group Ltd. MRVL is set to report second-quarter fiscal 2021 results on Aug 27.

The company projects revenues of $720 million (up or down up to 5%) for the quarter. The Zacks Consensus Estimate for revenues is pegged at $720.5 million, suggesting growth of 9.7% from the year-ago quarter.

Marvell expects non-GAAP earnings per share between 17 cents and 23 cents. The consensus mark of 20 cents indicates a 25% increase, year over year.

Marvell Technology Group Ltd. Price and Consensus

Marvell Technology Group Ltd. Price and Consensus

Marvell Technology Group Ltd. price-consensus-chart | Marvell Technology Group Ltd. Quote

Notably, Marvell's guidance for the second quarter of fiscal 2021 takes into account the U.S. government's export restriction on certain Chinese customers. The company’s wider guidance range for revenues and earnings reflects the uncertainties associated with the coronavirus pandemic.

The company surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 10.4%.

Factors at Play

Last year’s acquisitions of Avera and Aquantia are projected to have driven Marvell’s networking segment revenues in the fiscal second quarter.  Aquantia’s solid pipeline of design wins is likely to have been a positive. The consensus mark for networking revenues is pegged at $404 million, calling for 22.4% year-over-year growth.

The company’s storage revenues are expected to have improved year over year as well as sequentially. The Zacks Consensus Estimate for storage business revenues is pegged at $283 million, indicating a slight improvement from the year-ago quarter’s level of $275 million and the previous-quarter level of $259 million.

During the fiscal first-quarter earnings conference call, Marvell had stated that it expects the storage business to start recovering from the pandemic’s impact on the supply chain in the fiscal second quarter, although the business is likely to fully bounce back in the third quarter. The company also noted that initial shipments of custom SSD controllers for system-level applications commenced in the fiscal second quarter, which is encouraging. Marvell had anticipated storage revenues to be up 10% sequentially in the quarter under review.

What Our Model Says

Our proven model does not predict an earnings beat for Marvell this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Marvell currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Nutanix NTNX has an Earnings ESP of +5.71% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ambarella AMBA has an Earnings ESP of +100.00% and carries a Zacks Rank of 3, at present.

HP Inc. HPQ has an Earnings ESP of +2.86% and carries a Zacks Rank of 3, currently.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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