Marvell Tech misses profit, sales expectations and conducts internal accounting probe

Marvell Technology Group Ltd. reported a preliminary third-quarter net loss of $61.7 million, or 12 cents a share, after a profit of $115.3 million, or 22 cents a share, in the same period a year ago. Excluding non-recurring items, such as one-time costs for restructuring related to its mobile handset platform business, adjusted earnings per share came to 5 cents, missing the FactSet consensus of 13 cents. Revenue fell 5% to $674.1 million from $711.3 million, below the FactSet consensus of $730 million, as storage revenue dropped 16% and networking revenue slid 8%. Gross margin narrowed to 43.3% from 51.1%. The company said its audit committee was conducting an independent investigation of accounting and internal control matters, including a review of certain revenue recognized in the fiscal first and second quarters of the current year, and the fourth quarter of the previous fiscal year. The semiconductor maker said it has been contacted by the Securities and Exchange Commission and the United States Attorney's Office regarding the audit committee's investigation. The stock, which is currently halted for trading, has tumbled 36% year to date through Friday, while the S&P 500 has gained 1.6%.

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