Marvell’s new management starts work with full force

After a long time, Marvell Technology’s (MRVL) earnings page, filled with backdated earnings and its most recent earnings for fiscal 2Q17 ended July 2016, reported a profit, even though its revenue fell sequentially. 

The company has posted conservative guidance for fiscal 3Q17 as its new management puts things into place.

Marvell’s earnings were very much anticipated. The company stopped releasing earnings after fiscal 1Q16 due to certain accounting, legal, and management issues. Its fiscal 2Q16 earnings came under scrutiny as it posted unexpected losses and announced its plans to close its mobile business. Its founders were ousted from management in April 2016.

Over the last two quarters, its issues were resolved. New management took Marvell’s helm in June 2016 with the appointment of Matthew Murphy from Maxim Integrated (MXIM) as Marvell’s CEO.

Financial highlights

At the end of July 2016, Marvell released all its pending earnings from fiscal 2Q16 to fiscal 1Q17. In this series, we’ll see how the company performed during these years. We’ll also take a look at its future growth potential.

As seen in the above graph, the company’s revenue and profits improved in fiscal 2Q17, as it saw strong demand in the storage, networking, and wireless markets. This growth was slightly offset by falls in the mobile platform market. The company’s improved margins were the result of its new management’s efforts to reduce costs and improve profits.

Renewed demand in the HDD market

Marvell is a leader in the HDD (hard disk drive) space, where the overall market has been declining. However, some stability has been witnessed in HDD sales as demand increases and inventory replenishes. Marvell’s key customers Western Digital (WDC) and Seagate (STX) have reported revenue growth. Rival Broadcom (AVGO) has also reported stability in the storage space.

Some analysts believe that new management will change the company’s financial performance and could even sell part or all of the company. 

In the next part of the series, we’ll look at the company’s revenue and the factors driving that revenue.