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What: Shares of chip maker Marvell Technology Group (NAS: MRVL) sank 15% today after its quarterly results and guidance disappointed Wall Street.
So what: Marvell shares had been rebounding nicely over the past month, but today's wide second-quarter miss -- adjusted EPS of $0.24 on revenue of $816.1 million versus the consensus of $0.27 and $852 million -- coupled with downbeat guidance for the current quarter is forcing Mr. Market to sober up. Although Marvell's data-storage products business grew nicely, declining PC demand and market-share losses at its mobile chip segment continue to weigh heavily on sales, squashing investor hopes of a near-term turnaround.
Now what: Management now expects adjusted third-quarter EPS of $0.24 on revenue of $800 million to $850 million, well below Wall Street's view of $0.32 and $913 million, respectively. "Despite the soft near-term demand environment, we are maintaining good profitability and continue to deliver shareholder value through our share repurchase and dividend programs," Chairman and CEO Dr. Sehat Sutardja reassured investors. With the stock hitting a new 52-week low today and trading at a paltry forward P/E of 8, buying into that optimism might even pay off.
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The article Why Marvell Shares Plummeted originally appeared on Fool.com.Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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