Cree revenues up 17 percent in first quarter

Durham lighting company earns record $315.8M in first quarter

dranii@newsobserver.comOctober 16, 2012 

Shares of LED lighting company Cree rose as much as 6 percent in after-hours trading Tuesday after the company announced double-digit increases in revenue and net income in its fiscal first quarter.

The Durham-based company reported after the markets closed Tuesday that revenue totaled a record $315.8 million for the quarter that ended Sept. 23, up 17 percent from a year ago and 3 percent higher than the immediately preceding quarter. The company previously had forecast that revenue would range between $305 million and $325 million in the quarter.

Net income totaled $16.1 million, or 14 cents per share, up 26 percent from a year ago. Net income after excluding stock-based compensation and amortized goodwill totaled $31.8 million, up 13 percent.

Earnings per share exceeded analysts estimates, but revenue fell short of expectations, according to Bloomberg News.

“We started the year strong in Q1,” CEO Shuck Swoboda said in a conference call. “I think it is clear we’re on the right track.”

Swoboda also noted that the company has improved its profit margins over the past three quarters.

Cree has about 2,000 workers in Durham and more than 5,800 worldwide. It produces indoor and outdoor LED light fixtures as well as components other companies use in their lighting products. Its LEDs also are used for illuminating dashboards, mobile phones, televisions and signs.

Swoboda said Cree is closing the price gap between its LED lights and conventional lights as it launches new products that produce more illumination for the buck. Cree has long maintained that LED lighting is cheaper in the long haul when you account for their lower electric consumption and maintenance costs.

The upfront cost of a few Cree lighting products are “almost at price parity” with conventional lights, Swoboda said. But the upfront costs of Cree’s lights vary from market to market, and some Cree products are three to four times more expensive than the conventional competition.

“For the vast majority of lighting, LED is more expensive today,” Swoboda said. “There is definitely a gap.”

Last month, Cree launched a 10-year warranty on its newest commercial lighting fixtures, which Swoboda called “unheard of in the traditional lighting industry.”

Cree shares closed Tuesday at $26.19, up 74 cents. Its shares have risen 19 percent this year.

Cree is projecting more growth in the current quarter. It anticipates revenue will range from $320 million to $340 million in the quarter, which ends Dec. 30.

Ranii: 919-829-4877

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