Marvell forecasts revenue below estimates on Huawei ban; shares slide

(Reuters) – Marvell Technology Group Ltd forecast third-quarter revenue below Wall Street estimates on Thursday, as a ban on selling components to Chinese telecommunications giant Huawei Technologies [HWT.UL] hurt the U.S. chipmaker.

Marvell’s shares fell 5.2% in after-hours trading.

The company said in the first quarter that it had stopped shipment to Huawei, one of its key customers, following the U.S. ban on the phone maker.

“In our third quarter, we face a worsening macro environment along with the ongoing impact from the current restrictions on shipments to Huawei”, Chief Executive Officer Matt Murphy said in a statement on Thursday.

The U.S. government blacklisted Huawei in May, alleging the Chinese company is involved in activities contrary to U.S. national security or foreign policy interests.

The chipmaker expects current-quarter revenue of $660 million, plus or minus 3%, below analysts’ estimates of $697.58 million, according to IBES data from Refinitiv.

Separately, the company reported revenue and profit for the second quarter above analysts’ estimates, helped by strong sales in its networking business that sells ethernet and Wi-Fi products.

Revenue in the quarter ended Aug. 3 fell 1.3% to $656.6 million, but above estimates of $652.1 million.

The company reported a net loss of $57.3 million, or $0.09 per share, compared with a profit of $6.8 million, or $0.01 per share, a year earlier.

Excluding items, the company reported a profit of $0.16 per share, 1 cent above the average analyst estimate.

Reporting by Ayanti Bera in Bengaluru; Editing by Shailesh Kuber and Maju Samuel

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