Marvell Technology Group Ltd. (NASDAQ: MRVL) stock fell over 0.4% on 30th August, 2019 (As of 12:07 pm GMT-4 ; Source: Google finance) as the firm offered weak Q3 guidance because of the U.S. government’s export restriction on Huawei Technologies Co. Ltd.
MRVL in the second quarter of FY 20 has reported the adjusted earnings per share of 16 cents, while reported the adjusted revenue growth of 35.9 percent to $656.6 million in the second quarter of FY 20
First, in the networking business, revenue during the quarter was $330 million, down 3% sequentially with seasonal growth in Wi-Fi products more than offset by the US government’s export restrictions on Huawei and a pause in demand from the base station OEMs, as they transition from 4G to 5G. The strong execution by the engineering and operations teams coupled with a very close relationship with the lead customer is enabling the company to launch the first 5G products, which include the Fusion baseband and OCTEON Embedded Processors, and the Ethernet Switches and PHYs into production in the third quarter, ahead of plan. This early production start gives the company and the customer further confidence in ramping up in the fourth quarter.
Other product revenue was $52 million and accounted for 8% of total company revenue. In the second quarter, the company returned $56 million to shareholders through $16 million in share repurchases and $40 million in dividends. The company has ended the quarter with $573 million in cash and cash equivalent and the long-term debt of $1.7 billion. The company have paused to share repurchases and debt reduction, while the company work toward the closing the acquisition so far Aquantia, Avera, as well as to the sales Wi-Fi business to NXP. And then we currently anticipate all of these transactions to be completed within our previously communicated time frame.
For the third quarter 2020, the company expects revenue be $660 million +/- 3%, Non-GAAP gross margin is expected to be 63% to 64%, Non-GAAP operating expenses are expected to be $280 million +/- $2.5 million and Non-GAAP diluted income per share is expected to be $0.15 to $0.19 per share.