Shares of LED lighting company Cree plunged as much as 16 percent in after-hours trading Tuesday after the companys guidance for its fiscal first quarter fell short of Wall Streets expectations.
The Durham-based company also reported fourth-quarter revenue after the markets closed that was a bit less than anticipated, while net income was in line with analysts projections.
Cree shares have been riding high, more than doubling since the beginning of the year, thanks to its strong sales growth and the introduction of light bulbs sold exclusively at Home Depot that retail for $10 a breakthrough price for an LED bulb. Earlier Tuesday, the companys shares rose $1.01 to close at $75.76, a three-year high.
Cree makes indoor and outdoor LED light fixtures in addition to light bulbs, and it sells components that other companies use in their lighting products. Its LEDs also are used for illuminating car dashboards, mobile phones, televisions and signs.
The company projected that net income for its fiscal first quarter will range between 36 cents and 41 cents per share, versus 43 cents forecast by analysts. Cree expects first-quarter revenue to be between $380 million and $400 million; analysts were projecting $398 million.
CEO Chuck Swoboda said in an interview that the company hadnt previously issued a first-quarter forecast and noted that its revenue projections call for a quarter-to-quarter increase.
From a Cree standpoint, we feel we are making progress, he said.
Revenue for the fourth quarter that ended June 30 rose 22 percent to $375 million but nonetheless was below the $377 million pegged by analysts. The companys as-anticipated net income rose 56 percent to $45.6 million, or 38 cents per share after excluding stock-based compensation and amortized goodwill.
Swoboda said revenue from lighting products was impacted by some larger customer orders that the company expected to close in the fourth quarter but slipped into the first quarter instead.
But he was ebullient about the companys light bulb sales.
Bulb sales right now are ahead of our expectations, and I think it would be reasonable to say theyre probably ahead of Home Depots expectations as well, Swoboda said.
LED bulbs are more expensive, but they pay off in the long-term thanks to a longer life span and lower energy consumption.
Last month Cree introduced new flood lights, which can be used in recessed or track light sockets, that are sold at Home Depot and start at $19.97. Cree says the bulbs use 85 percent less energy and last 25 times as long as comparable incandescent flood lights.
As we have said in the past, we are not trying to be a traditional lighting company, Swoboda said. We are a technology company developing products to fundamentally change the lighting experience.
For the entire fiscal year Cree reported revenue of $1.39 billion, up 19 percent. Net income was $155.4 million, or $1.32 per share, an increase of 42 percent.