After reporting better than expected second quarter earnings, Marvell Technology Group (MRVL) is among the largest gainers, up more than 4.5% midday. The quarter just ended saw the company earn 18 cents, which was better than the street’s expectation of 15 cents per share. Although revenue fell by 24% from a year ago, the top-line came in better than expected as well at $640 million versus $619 million. Sequentially revenue improved by 23%, suggesting perhaps the fiscal first quarter was the low point. The semiconductor-maker topped analysts estimates even though 11 of them have raised earnings expectations within the last month, versus zero analysts become more bearish. Furthermore, the results even topped Marvell’s own call in June to lift 2Q revenue guidance because of increased demand among various end-markets.

Most importantly, Marvell management was more optimistic about the current quarter as they raised guidance significantly. (See earnings call transcript.) They are now anticipating EPS in the range of 18 to 26 cents, whereas the consensus estimate had MRVL pegged for just 17 cents per share. They are also lifting revenue projections to $680 million to $730 million, much better than the $640 expectations. Perhaps most impressive was the companies greatly improved gross margins, which came in at 55% on a GAAP basis, versus 50.6% in the first quarter, and 51.8% last year. This improved profitably lead to free cash flow of $175.3 million or 6% better than a year ago and 33% better than last quarter.

SolarWinds (SWI), an Austin-based provider of network management software, went public today and received a warm welcome from investors . After initially pricing at $12.50, the stock hovered around $14 at midday. Along with other successful IPO predecessors such as DigitalGlobe (DGI) and Rosetta Stone (RST), today's pricing makes it seem like the IPO markets are indeed beginning to thaw.

Business Overview (from prospectus)

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