Technology

Marvell Preliminary Results Do Not Shake Investors Too Much

Paul Ausick

Published: December 7, 2015 11:40 am

Last Updated: January 13, 2020 4:22 pm

When chipmaker Marvell Technology Group Ltd. (NASDAQ: MRVL) reported preliminary third-quarter results Monday morning, the company’s stock was halted from trading in the premarket session to give investors a chance to digest the report. When trading opened for the day the stock was down less than 0.1%.

In addition to a net loss of $0.12 per share ($0.05 adjusted), the company also updated its second-quarter results, following an independent investigation of some of Marvell’s accounting and internal control processes by the board’s audit committee.

Regarding its review of second-quarter results Marvell said:

For the second quarter of fiscal 2016, adjustments that have been recorded to the Company’s preliminary financial results due to the delayed filing as a result of matters occurring after September 11, 2015 comprise a $15 million charge that includes a write down of inventory primarily associated with certain products for the mobile handset platform business that the Company announced it was restructuring, $2.1 million of additional other charges and a $3.5 million reduction in income tax benefit. Accordingly, the Company’s GAAP net loss and GAAP diluted loss per share for the second quarter of fiscal 2016 are approximately ($21) million and ($0.04) more than previously reported respectively.

Concerning the audit committee’s review, the company noted:

The investigation generally includes a review of certain revenue recognized in the first and second quarters of fiscal 2016 and the fourth quarter of fiscal 2015, the accrual of a litigation reserve, and the initial assertion by the Company’s CEO and Chairman of ownership of certain patent rights related to his Final-Level Cache invention and his later assignment of associated patent applications to the Company. The Audit Committee is also reviewing disclosure concerning the foregoing matters and related circumstances, and whether senior management’s operating style during the relevant periods resulted in an open flow of information and communication to set an appropriate tone for an effective control environment.

Marvell’s shares flat in late morning trading Monday, at $9.24 in a 52-week range of $7.55 to $16.78.