FBR: Marvell Delisting A 'Possibility,' But Company Likely To File Reports In Timely Manner Going Forward

Delisting of Marvell Technology Group Ltd. MRVL shares from the NASDAQ remains a possibility, with a negative preannouncement and another filing extension request. FBR’s Christopher Rolland maintained a Market Perform rating for the company.

Significant Revenue Decline

Marvell’s delayed 10-K filing indicated a significant y/y decline in net revenue in fiscal 2016. “While the late filing was expected given that Marvell has yet to report earnings for fiscal 2Q16–4Q16, we do not have a sense of how much "significantly lower" revenues will be; however, we note that the Street’s estimate is already down –25% YOY,” analyst Christopher Rolland wrote.

Marvell is facing a decline in demand for its storage products. This, along with the restructuring of the company’s mobile division, adversely impacted fiscal 2016 revenues. “The filing comes just weeks after we noted positive actions the company had taken to restore confidence by completing its audit committee investigation, which identified no fraudulent activity, and settling its lawsuit with Carnegie Mellon University,” Rolland mentioned

Another Filing Extension Request

Marvell was scheduled to have filed its previously unfiled quarterly reports by March 8, which it did not. Since then, the company has requested a hearing for another extension, which would take place in mid-April. The analyst commented that although delisting does remain a possibility, Marvell is likely to file quarterly reports in a timely manner now that the audit investigation has been completed.