07:36 MRVL Marvell: Color on quarter (11.52 )
Citigroup says a much better-than-expected print for MRVL left little for the Bears. However, once again the stock traded off post-close on the outlook's sequential growth (-8%) despite Street F1Q09 and F09 revs which will reset HIGHER, and Street F09 EPS which should remain flat. Firm believes MRVL's high-teens annual rev growth and 700 bps of intra-year operating margin expansion are compelling catalysts which can pull the shares steadily higher through the year. A trough 15x multiple on firm's C08E $0.72 EPS implies downside to $11.0 vs. upside of 74% to their $19 tgt, compelling risk/reward... Thomas Weisel says MRVL reported 4QF08 revs of $845 mln, up 11.4% q/q, solidly beating their $783 mln est and consensus $780 mln est on better than expected demand for SoC storage products, enterprise-class communication products and cellular products. Non-GAAP EPS of $0.20 handily beat firm's and consensus by $0.06 and $0.09, respectively, mainly on the higher rev. According to mgmt, firm says the weaker sales are related to a temporary slower demand in game console and other consumer wireless customer markets. For the longer term, mgmt believes top line could grow between the high teens to low 20's y/y. The difference between high and low growth may depend on the economy... Friedman Billings says all MRVL's rev news was offset by a disappointing 1Q gross margin and operating expense guidance. 1Q gross margin guidance reflects little improvement in cellular margins, as many would have expected. Furthermore, MRVL's 1Q opex guidance is greater than what the firm spent in 3Q of last year before it eliminated 400 employees through headcount reductions. While its fundamental product and rev momentum is robust, its same old "opex gone wild" problems persist...
