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Late yesterday, Marvell Technology (NASDAQ: MRVL) reported a lower second-quarter profit, thanks to a large drop in sales amid struggles throughout the chip sector. That said, the company did vault higher after its announcement, thanks to its sales forecast.
The chipmaker reported second-quarter earnings of nine cents per share, down from 11 cents per share a year ago. Adjusted quarterly income checked in at 18 cents per share. Quarterly revenue slipped to $640.6 million, which was down from $842.6 million in the second quarter a year ago. Expectations called for earnings of 13 cents per share on revenue of $615 million.
Quarterly income also rose sequentially from the first quarter, which MRVL's CEO noted "reflects both an improving economy and the acceptance by customers of our new and existing products." Looking ahead, MRVL forecast third-quarter earnings between $680 million to $730 million, which is far better than the Street's forecast earnings of $641.6 million.
The stock vaulted in after-hours trading and is poised to start the day substantially higher. Such an open is a continuation of MRVL's outstanding 2009 performance. MRVL's 2009 nadir was set in the third week of the year, and the stock has marched steadily higher along the support of its 10-week moving average.
With this support in place, it certainly appears that MRVL is ready to ride the wave higher; especially with good news coming from the tech sector. Where could it end? At this point it is difficult to determine, because the stock has now eclipsed its 50-month moving average and may face resistance in the $19 region. Even if this is the case, MRVL is a solid performer and it sure seems that this performance is going to continue as the economy begins to recover.
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