Marvell to buy back $1 billion of shares

Industry: Manufacturing 2016-11-18

Marvell Technology Group Ltd (MRVL.O) reported a better-than-expected quarterly profit and said it would buy back $1 billion of shares.

Shares of Marvell, which has a market value of $6.88 billion, were up 6.6 percent in after-market trading on Thursday.

The chipmaker said the buyback would replace an existing $3.25 billion program, which had a balance of about $115 million.

Marvell said it intends to buy back about $500 million of shares over the next 12 months.

The company reported net income of $72.6 million, or 14 cents per share, in the third quarter ended Oct. 29, compared with a loss of $57.75 million, or 11 cents per share, a year earlier.

Excluding items, the company earned 20 cents per share, beating the average analyst estimate of 12 cents, according to Thomson Reuters I/B/E/S.

Marvell, which had been under pressure from activist investor Starboard Value LP to shake up its management and cut costs, revamped its management team and named a new chief executive earlier this year.

The company said this month that it planned to cut about 900 jobs globally and sell non-core assets in a bid to lower costs by as much as $190 million annually.