Cree earnings beat Wall Street's estimates

Lighting company’s $346.3 million beats Wall Street estimates

dranii@newsobserver.comJanuary 22, 2013 

Shares of LED lighting company Cree jumped as much as 16 percent in after-hours trading after it reported quarterly revenue and net income that beat Wall Street’s expectations.

The Durham company reported after the markets closed Tuesday that revenue totaled a record $346.3 million for its fiscal second quarter that ended Dec. 30, up 14 percent from a year ago as well as 10 percent higher than its fiscal first quarter. The consensus of analysts polled by Bloomberg News was that revenue would reach $331 million.

Net income totaled $36.9 million, or 32 cents per share, up 29 percent from a year ago after excluding stock-based compensation and amortized goodwill. Analysts were anticipating 30 cents per share.

Looking ahead, Cree projected revenue in its fiscal third quarter would range between $325 million and $345 million – again, higher than analysts’ forecasts.

Several analysts lauded the company’s performance during a conference call in which CEO Chuck Swoboda and Chief Financial Officer Michael McDevitt discussed the latest results.

“Congratulations, gentlemen,” said Cantor Fitzgerald analyst Dale Pfau. “Fine quarter, fine outlook.”

Cree produces its own indoor and outdoor light fixtures as well as components that other companies use in their lighting products. Its LEDs also are used for illuminating car dashboards, mobile phones, televisions and signs.

The sales increase was across the board in the latest quarter. Lighting sales rose 14 percent compared with the prior quarter, while LED sales rose 7 percent.

LED lights are a small part of the overall lighting market, but they’re the fastest-growing segment of the market.

Although LED lights cost more than conventional lights, Cree maintains overall costs are cheaper when you account for their lower electric consumption and longer life span. Moreover, Cree and its competitors have been chipping away at the gap in upfront costs with progressively lower prices achieved through advances in technology and greater volumes.

“We remain focused on new product innovation to drive our growth,” Swoboda said. “We continue to work on new ways to drive adoption of LED lighting and build Cree’s brand in the market.”

Swoboda also said that the company plans to boost spending on marketing in the next few quarters “to more aggressively promote our innovative new products.”

Cree has 5,500 employees worldwide, including more than 2,300 in the Triangle.

Earlier Tuesday, Cree shares closed at $33.47, down 29 cents. The closing price was close to its 52-week high of $34.72, recorded at the beginning of the month.

Ranii: 919-829-4877

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