Strong quarterly earnings reports from lesser-followed technology stocks is welcome. The markets continue to reach new highs but as long as the earnings justify the P/E multiples, investors need not panic.
Marvell Technology Group (MRVL) earned $0.22 per share on revenue of $571.4 million. Though revenue fell 7.3 percent, Marvell beat estimates and sustained gross margin of 57.6 percent. This signals a healthy market for hard disk suppliers, namely Seagate Technology (STX) and Western Digital (WDC).
Marvell forecast gross margin of 59% in Q1 and EPS as high as $0.23 per share. The company’s balance sheet is healthy at around $3 a share in cash.
Broadcom (AVGO) reported $3.63 a share on revenue of $4.14 billion. The combined Avago/Broadcom reported revenue up 134% Y/Y. The forward guidance is clear and strong, signaling no lost business from Apple or Samsung.
Optical network supplier Ciena Corporation (CIEN) failed to impress an analyst at Bank of America’s Merrill Lynch. The company is scheduled to report results on Wednesday, March 8. Despite the downgrade from the bank, Ciena trades at a forward P/E of 13.3 times and is at a 52-week high. 100G metro product demand will grow while the optical market for networks is still strong.