Cree Inc. (CREE) Tuesday reported a surge in profit for the third quarter, on improved gross margins, with revenues jumping 23 percent reflecting strong sales of lighting products. Both earnings and revenue came in ahead of analysts' estimates.
The energy efficient lighting products maker also detailed a fourth-quarter outlook with earnings in line with expectations, while revenues are indicated to beat estimates. Nevertheless, shares of Cree fell seven percent in after-hours trade.
Durham, North Carolina-based Cree's profit surged to $22.2 million or $0.19 per share from $9.5 million or $0.08 per share last year.
Adjusted earnings improved to $0.34 per share from $0.20 per share a year ago. On average, 25 analysts polled by Thomson Reuters expected earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.
Cree's total revenues grew 23 percent to $348.9 million from $284.8 million last year. Analysts expected revenues of $342.76 million for the quarter.
Gross margin for the quarter improved to 38.1 percent from 34.9 percent last year.
Cree has been reporting earnings growth for past few quarter, as demand for LED lighting products and semiconductor products continues to improve.
LED products revenue rose 8 percent to $195.6 million, while lighting products sales jumped 51 percent to $130.7 million. Power and RF products revenues rose 31 percent to $22.7 million.
Looking forward to the fourth quarter, Cree expect earnings of $0.20 to $0.26 per share, adjusted earnings of $0.34 to $0.40 per share and revenues of $365 million to $385 million. Analysts currently expect fourth-quarter earnings of $0.37 per share on revenues of $367.58 million.
CEO Chuck Swoboda said, "Overall company backlog is ahead of this point last quarter and we are targeting solid growth for Q4. We remain focused on using new product innovation to grow our business and build the Cree brand."
CREE closed Tuesday's trading at $57.69, up $2.15 or 3.87%, on a volume of 4.7 million shares on the Nasdaq. The stock, however, lost $4.19 or 7.26%, in after hours trade.
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