Marvell: Fiscal 3Q11 Financial Results

Marvell Technology Group Ltd. reported financial results for the third quarter of fiscal 2011, ended October 30, 2010.

Net revenue for the third quarter of fiscal 2011 was $959 million, a 20 percent increase from $803 million in the third quarter of fiscal 2010, ended October 31, 2009, and an 7 percent sequential increase from $896 million in the second quarter of fiscal 2011, ended July 31, 2010.  

GAAP net income was $256 million, or $0.38 per share (diluted), for the third quarter of fiscal 2011, compared with a GAAP net income of $202 million, or $0.31 per share (diluted), for the third quarter of fiscal 2010. GAAP net income in the second quarter of fiscal 2011 was $220 million, or $0.33 per share (diluted).  

Non-GAAP net income was $307 million, or $0.45 per share (diluted), for the third quarter of fiscal 2011, as compared with non-GAAP net income of $232 million, or $0.35 per share (diluted), for the third quarter of fiscal 2010.  Non-GAAP net income for the second quarter of fiscal 2011 was $273 million, or $0.40 per share (diluted).  

"We delivered excellent results, which were at the high-end of our original guidance for the third quarter," said Dr. Sehat Sutardja, Marvell’s Chairman and Chief Executive Officer. "We delivered significant long term growth in all of our target end-markets.  We continue to make excellent progress within our mobile and wireless end market, which increased over 20 percent sequentially, and we experienced improved demand within our storage end-market as revenue increased 3 percent sequentially. Furthermore, we continue to deliver robust margins and significant free cash flow, which highlights the long term leverage our business model can deliver."

Marvell reports net income, basic and diluted net income per share in accordance with U.S. generally accepted accounting principles (GAAP) and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income to non-GAAP net income for the three months ended October 30, 2010, July 31, 2010 and October 31, 2009 appear in the financial statements below. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation, amortization and write-offs of acquired intangible assets, restructuring costs and certain other expenses or benefits.  

GAAP gross margin for the third quarter of fiscal 2011 was 59.3 percent, compared to 57.5 percent for the third quarter of fiscal 2010 and 59.1 percent for the second quarter of fiscal 2011.  

Non-GAAP gross margin for the third quarter of fiscal 2011 was 59.5 percent, compared to 57.8 percent for the third quarter of fiscal 2010 and 59.3 percent for the second quarter of fiscal 2011.  

Shares used to compute GAAP net income per diluted share for the third quarter of fiscal 2011 were 675 million shares, compared with 660 million shares in the third quarter of fiscal 2010 and 675 million shares in the second quarter of fiscal 2011. Shares used to compute non-GAAP net income per diluted share for the third quarter of fiscal 2011 were 677 million shares, compared with 664 million shares for the third quarter of fiscal 2010 and 678 million shares for the second quarter of fiscal 2011.  

Cash flow from operations for the third quarter of fiscal 2011 was $368 million, up from the $204 million in the third quarter of fiscal 2010 and up from the $319 million reported in the second quarter of fiscal 2011. Free cash flow for the third quarter of fiscal 2011 was $338 million, up from the $196 million reported in third quarter of fiscal 2010, and up from the $292 million reported in the second quarter of fiscal 2011. Free cash flow as presented above is defined as cash flow from operations, less capital expenditures and purchases of technology licenses.