logo
Share SHARE
FONT-SIZE Plus   Neg

Cree Profit Drops, Sees Weak Q4; Shares Down 7% - Update

Cree Inc. (CREE) Tuesday reported a 50 percent decline in profit for the third quarter, hurt mainly by a huge slump in margins reflecting higher expenses. Earnings fell short of estimates by a penny, while revenues that grew 30 percent, missed expectations.

Moving ahead, the company detailed its financial guidance for the fourth quarter which is below current market expectations. Shares of the energy-efficient LED lighting maker shed over seven percent in extended hours.

Gross margins for the third quarter dropped to 34.9 percent from 41.7 percent, while operating margins plummeted to 1.8 percent from 9.0 percent last year.

Cost of revenues increased to $185.4 million from $127.8 million last year. Sales, general and administrative expenses for the quarter rose to $94.4 million from $71.7 million last year.

Cree, which manufactures LED diodes, LED lighting, and semiconductor solutions for wireless and power applications, said revenues grew 30 percent to $284.8 million, but still fell short of analysts' estimate of $300.76 million.

Durham, North Carolina-based Cree's third-quarter net income dropped to $9.5 million or $0.08 per share from $18.9 million or $0.17 per share last year. On an adjusted basis, net income slipped to $0.20 per share from $0.27 per share last year. On average, twenty nine analysts polled by Thomson Reuters expected earnings of $0.21 per share. Analysts' estimates typically exclude special items.

Looking forward to the fourth quarter, Cree expects net income in a range of $0.04 to $0.10 per share and adjusted income of $0.20 to $0.26 per share. Analysts currently expect earnings of $0.28 per share for the fourth quarter.

Cree, which competes with Nichia Corp., Epistar Corp., OSRAM Semiconductor and Samsung LED Co., anticipates fourth-quarter revenues of $295 million to $315 million. Analysts currently expect revenues of $323.61 million for the quarter.

CREE closed Tuesday's trading at $31.90, up $0.98 or 3.17% on the Nasdaq. The stock, however, fell $2.26 or 7.08% in after-hours trade. Trading volume for the day was 5.5 million shares, above the three-month average volume of 3.3 million.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Dell Inc. decided to end its Venue brand Android tablets and will focus on Windows 10 2-in-1 devices. There will be no operating system upgrades for Venue, however it will continue active warranty and service contract. Tech giant Apple Inc. has developed a new technology that will prohibit audiences using their iPhones to record concerts. The Cupertino, California-based company has secured a patent in the US for its new technology. The technology uses infrared signals to shut down cameras on audience members' smartphones. The... Snacks giant Mondelez International Inc. (MDLZ) made a takeover bid of $23 billion to acquire chocolate behemoth Hershey Co. (HSY) that would create the world's largest chocolate company. Nevertheless, shares of Hershey jumped over 15 percent after the company revealed that it has rejected the offer. "The...
comments powered by Disqus
Follow RTT