Cree shares rise in after-hours trading after earnings beat estimates

dranii@newsobserver.comJanuary 21, 2014 

Shares of LED lighting company Cree rose as much as 6 percent in after-hours trading Tuesday after the company reported a 20 percent jump in quarterly revenue and a 54 percent increase in net income – both of which exceeded analysts’ expectations.

“We continue to take advantage of the global shift to LED lighting and our strategy to use new product innovation to drive our growth by taking share from traditional technologies,” CEO Chuck Swoboda told analysts during a conference call. LED lights are a small but fast-growing share of the lighting market, thanks to energy efficiency and a long life expectancy that compensates for higher upfront costs.

Sales of Durham-based Cree’s lighting products were 42 percent higher than a year ago and 17 percent higher than the preceding quarter. Cree makes LED light bulbs and indoor and outdoor light fixtures, as well as components other companies use in their lighting products. Its LEDs also illuminate car dashboards, mobile phones, televisions and electric signs.

Sales of Cree’s LED bulbs to consumers doubled in the quarter, Swoboda said, although that’s not the same as saying that Cree’s shipments doubled. Swoboda said shipments increased, but at a lower rate that he didn’t specify.

Swoboda also said the company expects to reduce the suggested retail price of its LED bulbs, which are sold exclusively at Home Depot, this spring. But he provided no details.

Those LED bulbs are produced only at the company’s manufacturing plant in Durham, and Swoboda said in a brief interview late Tuesday that the company has no plans to change that situation.

“As long as the innovation continues at this rate and we’re making lots of ongoing improvements and changes, it makes sense to have the R&D team and the production team connected,” he said. Cree has 6,361 employees worldwide, including 2,344 in Durham.

Wall Street’s initial reaction to the results unveiled Tuesday marked a stark contrast to the prior two quarters, when shares of Cree tumbled in after-hours trading after the company issued its results. Cree releases its quarterly earnings after the markets close.

The company reported that revenue for the quarter that ended Dec. 29 totaled a record $415.1 million, up from $346.3 million. Wall Street analysts polled by Bloomberg News were predicting $412.6 million.

Net income after excluding stock-based compensation and amortized goodwill totaled $56.8 million, or 46 cents per share. Analysts were anticipating 39 cents per share.

However, Cree’s guidance for its next fiscal quarter, also issued Tuesday, was on the light side of what analysts were expecting.

Cree projected that revenue next quarter would range from $390 million to $420 million. Analysts were anticipating $413.2 million.

The company projected that net income would range between 34 cents and 41 cents on a per-share basis; analysts had projected 40 cents.

Earlier Tuesday, Cree shares closed at $62.83, up 33 cents. Cree shares hit a 52-week high of $75.76 in August.

Ranii: 919-829-4877

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