March 7 (Reuters) - Marvell Technology forecast first-quarter results below market expectations on Thursday, hurt by weak demand for its custom chips used in artificial intelligence applications, sending the company's shares down about 5.7% in extended trade.
The company had flagged in November that it expects roughly half its revenue to decline in the first quarter, weighed down by weak demand in its wireless carrier and enterprise markets.
"While we are forecasting soft demand impacting consumer, carrier infrastructure, and enterprise networking in the near term, we expect revenue declines in these end markets to be behind us after the first quarter," Marvell CEO Matt Murphy said on Thursday.
Customers, including cloud service providers and telecom operators, have been working on clearing their excess chip inventory after rapidly stocking up during the pandemic to avoid supply constraints.
These inventory corrections hinder the prospects of new orders from Marvell.
The company forecast first-quarter adjusted earnings per share of 23 cents, plus or minus 5 cents, compared with estimates of 40 cents per share, according to LSEG data.
Marvell, which also announced a $3 billion stock buyback authorization, said it expects first-quarter net revenue to be $1.15 billion, plus or minus 5%, compared with estimates of $1.37 billion.
The company reported fourth-quarter revenue of $1.43 billion, beating estimates of $1.42 billion, on the back of rapid adoption of artificial intelligence.
Revenue for the company's data center segment, which includes its custom AI chip business and networking equipment, rose 54% to $765.3 million, compared with estimates of $759.8 million.
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