) to underperform from in-line.
On Friday the company amended its product development pact with Intel. Analyst Clark Westmont says the downgrade is due to concerns about the company's exposure to the hard disk drive market (about 55%-60% of total sales). He thinks the January and April quarters will prove more difficult for the company than the consensus currently holds. He cut his $0.48 fiscal 2003 (Jan.) earnings per share estimate to $0.47, and cut the $0.72 fiscal 2004 estimate to $0.68; he reduced the $25 target to $13.60.
Westmont notes that the amendment to the Intel contract (15%-17% of sales) will allow the companies to compete head to head. He says, while this could start to impact Marvell's sales to Intel in the second half of calendar year 2003, he feels this always has been a matter of when, not if.