Cree shares rise in after-hours trading

A shopper examines Cree California-compliant light bulbs on display at a Home Depot in Burbank, Calif., Oct. 27 2013.
A shopper examines Cree California-compliant light bulbs on display at a Home Depot in Burbank, Calif., Oct. 27 2013. NYT

Shares of Cree jumped as much as 9 percent in after-hours trading Tuesday after the LED lighting company reported fiscal second-quarter results that beat Wall Street’s projections.

The latest results end a string of three consecutive disappointing quarters for the Durham-based company.

Cree reported after the markets closed Tuesday that revenue for the quarter that ended Dec. 28 totaled $413.2 million, down marginally from $415.1 million a year ago.

But analysts were anticipating that revenue would come in at $412.3 million, according to Bloomberg News.

Cree makes the nation’s best-selling LED light bulbs, plus indoor and outdoor light fixtures and components other companies use in LED lights.

Its LEDs also illuminate mobile phones, televisions, electric signs and car dashboards.

Sales of Cree’s lighting products totaled $230.2 million, up 33 percent from a year ago.

That more than offset the 29 percent decrease in sales of LED products to $151.9 million.

CEO Chuck Swoboda told analysts during a conference call that the decline was the result of lower demand, primarily in China.

Net income after adjustments was $37.9 million, or 33 cents per share, down 33 percent from a year ago but well ahead of the 22 cents per share analysts expected.

Net income in the quarter benefited from a R&D tax credit. Excluding the credit, the company’s adjusted earnings per share would have been 25 cents – still ahead of expectations.

Revenue from Cree’s power and RF, or radio frequency, business rose 18 percent to $31.1 million.

Cree’s power components are used in computer servers, uninterruptible power supplies and for solar energy. Its RF transistors and integrated circuits are used in radar and telecommunications systems.

Earlier Tuesday, Cree shares closed at $32.34, up $1.44. That’s half the stock’s 52-week high of $67.33 from last January.

Cree spent $266 million on buybacks of its stock during the quarter and plans additional share repurchases over the second half of its fiscal year.

“We felt like a pretty significant buyback made a lot of sense given our outlook on the mid- to longer-term prospects for the company,” Swoboda said.

He said Cree is “well-positioned to continue to grow the company and increase profits over the next several years.”