Market Scan
of Marvell Technology Entering 'New Growth Phase'
Kate DuBose Tomassi, 02.24.06, 4:21 PM ET
SG Cowen analyst Jim Liang reiterated an “outperform” rating on Marvell Technology Group, saying the semiconductor company has entered a new growth phase.
“Our core investment thesis on Marvell is built upon our view that the company should generate superior growth and return over the next several years, driven by the company’s entry into multiple large markets through the combination of internal development and acquisitions,” wrote the research analyst in a recent investor note.
The analyst cited several key growth drivers for 2006 including the inclusion of embedded WLAN in more consumer electronic devices. The company is ramping certain Motorola and Nokia phones with WLAN, he said.
In addition, “continued adoption of GigE switching in the enterprise networking market” should benefit the company, said Liang.
Other 2006 growth drivers include the ramp of the Maxtor desktop hard disk drive (HDD) in the late first quarter of 2006, and strong growth in consumer HDD, driven by demand for Apple Computer video iPods.
In 2007, the analyst cited optical storage and the merchant printer silicon market as new key growth drivers.
On Thursday, Marvell reported fiscal 2006 earnings of $1.36 and delivered 15% growth quarter-over-quarter, beating the analyst’s estimate of 14% growth. The company guided 5% to 6% quarter-over-quarter growth for the first quarter of fiscal 2007.
The analyst raised calendar year 2006 earnings and revenue estimates to $1.87 on revenue of $2.28 billion, from $1.81 per share on revenue of $2.18 billion. He also introduced estimates for calendar year 2007 of earnings of $2.30 per share on revenue of $2.81 billion. |
