Unpacking Q2 Earnings: Marvell Technology (NASDAQ:MRVL) In The Context Of Other Semiconductor Manufacturing Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the semiconductor manufacturing stocks have fared in Q2, starting with Marvell Technology (NASDAQ:MRVL).
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a slower Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 1.39% under consensus. Technology stocks have been hit hard by fears of higher interest rates as investors search for near-term cash flows and semiconductor manufacturing stocks have not been spared, with share prices down 12% since the previous earnings results, on average.
Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.34 billion, down 11.6% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a strong improvement in inventory levels. We were also glad that its EPS outperformed Wall Street's estimates. On the other hand, its free cash flow fell short of analysts' expectations, and its gross and operating margins regrettably declined.
"Marvell delivered second quarter fiscal 2024 revenue above the midpoint of guidance, and we are forecasting sequential revenue growth to accelerate in the third quarter. This growth is being driven primarily by AI and cloud infrastructure," said Matt Murphy, Marvell's Chairman and CEO.
The stock is down 8.45% since the results and currently trades at $52.44.
Best Q2: Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.43 billion, down 1.46% year on year, beating analyst expectations by 4.29%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates and optimistic revenue guidance for the next quarter.
Applied Materials achieved the strongest analyst estimates beat among its peers. The stock is up 0.66% since the results and currently trades at $138.3.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it's free.
Weakest Q2: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $340 million, down 9.83% year on year, missing analyst expectations by 1.79%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
The stock is down 24.4% since the results and currently trades at $99.47.
With most major chip manufacturers as customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technology and devices.
Teradyne reported revenues of $684.4 million, down 18.6% year on year, beating analyst expectations by 4%. It was a decent quarter for the company, with an impressive beat of analysts' EPS estimates but a decline in its operating margin. Also while next quarter's revenue guidance was ahead, non-GAAP EPS guidance was slightly below expectations.
The stock is down 14.3% since the results and currently trades at $98.21.
KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.36 billion, down 5.29% year on year, beating analyst expectations by 4.19%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates. On the other hand, its inventory levels materially increased and its gross margin shrunk.
The stock is down 6.97% since the results and currently trades at $449.
The author has no position in any of the stocks mentioned