Tags: Marvell | chip | outlook | cfo

Marvell Technology Cuts Outlook, CFO Quits, Shares Slide

Thursday, 18 Oct 2012 05:30 PM

Chipmaker Marvell Technology Group cut its revenue estimate for the current quarter and announced the departure of its chief financial officer, sending its shares down 10 percent in after-hours trading Thursday.

Chief Financial Officer Clyde Hosein resigned to pursue other opportunities, the company said.

Marvell, which makes chips used in PCs and servers, cut its revenue projection for the quarter to between $765 million and $785 million, because of a weak personal computer market and troubled global economy.

The cut, from a previous range of $800 million to $850 million, was below analysts forecasts of $813 million in revenue for the three months to the end of October, according to Thomson Reuters I/B/E/S.

"It's not that surprising to us given the weakness out in the PC market that Marvell is exposed to," said RBC Capital Market analyst Doug Freedman, when asked about the forecast cut.

"This may be a little worse than what I would have expected, but I was prepared for a pre-announcement."

One of Marvell's biggest customers, Western Digital Corp., slashed its outlook last month.

"The continued slowdown in the global economy during the third quarter is resulting in a weaker PC market than previously anticipated and thus lower demand from our storage HDD customers," chief executive Sehat Sutardja said in a statement.

Marvell also announced the departure of its Chief Financial Officer of four years.

"We're disappointed to see Clyde Hosein resign," said Stifel Nicolaus analyst Kevin Cassidy. "We've had a lot of faith built into Clyde. Investors will be disappointed."

Marvell said Brad Feller, vice president and corporate controller, would stand in as CFO until a replacement was found.

Shares in Marvell, which had already been struggling with market share losses in its mobile chip business, fell to $7.95 in late trading. The stock lost 1.9 percent during regular Nasdaq trading.

© 2015 Thomson/Reuters. All rights reserved.

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