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
The recent week marked the lull before the storm, with very few market moving economic numbers released during the week. However, the economic news flow picks up pace in the upcoming week, offering glimpses into every vehicle of economic growth, ranging from consumers to private sector activity to housing.... Life expectancy at birth in the U.S. is already lower than most other developed nations and is now projected to fall further behind by 2030, according to a new study. It also suggests that by 2030, national female life expectancy in South Korea could break the 90 year barrier. Department store chain J.C. Penney Co. Inc. on Friday reported a turnaround to profit in the fourth quarter as a slight decline in sales was more than offset by lower expenses. Adjusted earnings per share for the quarter beat analysts' expectations, while revenues slightly missed their estimates. Earlier today, J.C. Penny announced a plan to optimize its national retail operations.
comments powered by Disqus
Follow RTT