(Reuters) -Chipmaker Marvell Technology missed Wall Street expectations for first-quarter revenue on Thursday, hurt by weak customer spending in its wireless carrier and enterprise markets.
The company reported revenue of $1.16 billion, compared with estimates of $1.17 billion, according to LSEG data.
Shares of the Santa Clara, California-based company fell about 2% in extended trading.
Marvell’s results indicate that the company continues to struggle with weaker demand in consumer markets and a reduction in IT spending from its enterprise customers due to signs of a soft economy.
“We see a favorable environment for the second half of this fiscal year, driven by continued growth in data centers and the beginning of a recovery in enterprise networks and carrier infrastructure,” said Matt Murphy, CEO of Marvell.
Excess chip inventory among its carrier customers and telecom operators has prompted them to clear out their built-up inventory and not place new chip orders, hurting demand for companies like Marvell.
The company expects revenue for the second quarter that is in line with analyst expectations. It also sees adjusted earnings per share of 29 cents, plus or minus 5 cents, compared to estimates of 30 cents.
However, the company’s data center segment, which includes its custom chip business, continues to outperform as cloud computing companies ramp up spending on hardware used to power artificial intelligence.
Data center revenue rose 87% to $816.4 million, ahead of estimates of $772.6 million.
Revenue in the enterprise network segment fell 58% to $153.1 million, while the company’s carrier infrastructure unit fell 75% to $71.8 million.
On an adjusted basis, the company earned 24 cents per share, compared with estimates of 25 cents.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel)
