November 20, 2014 / 9:29 PM / 4 years ago

Chipmaker Marvell's fourth-quarter revenue forecast disappoints

(Reuters) - Marvell Technology Group Ltd forecast lower-than-expected revenue for the current quarter as weak demand for its chips used in third-generation mobile communication offset a rise in sales of its more profitable 4G LTE chips.

Shares of the company fell as much as 2.5 percent to $12.97 in after-market trading.

Marvell also took the brunt of weakness at its biggest customer Samsung Electronics Co Ltd.

Samsung’s market share declined in July-September for the third straight quarter, lagging Apple Inc in the premium market and overtaken by rivals such as Lenovo Group Ltd and Xiaomi Inc at the bottom end, research firm Strategy Analytics said.

Marvell has been investing heavily in fourth-generation LTE chips (4G) to keep pace with the expansion of high-speed networks in China and the United States.

The company forecast revenue of $880 million to $900 million for the fourth quarter, missing the average analyst estimate of $930.9 million, according to Thomson Reuters I/B/E/S.

Net income rose to $115 million, or 22 cents per share, in the third quarter ended Nov. 1, from $103 million, or 21 cents per share, a year earlier.

Excluding items, it earned 29 cents per share, in line with analysts’ expectations.

Revenue fell marginally to $930.1 million, missing market estimate of $976.1 million, due to weaker mobile business and lower revenue from our networking business.

The company’s shares closed at $13.30 on the Nasdaq on Thursday.

Reporting By Lehar Maan and Anannya Pramanick in Bangalore; Editing by Sriraj Kalluvila and Don Sebastian

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