There are going to be some remarkable entries at some point for some green stock leaders such as LED king Cree Inc (NASDAQ:CREE), but it’s likely still a bit too soon to consider larger positions. Part of the reason for that is due to the amount of technical damage to work through as well as the cautiously optimistic earnings comments I’m seeing in companies that have reported so far. Quite a few companies are edging out estimates but still posting less than stellar guidance. Cree is no exception.
The company is beating on the both the top and bottom line after the bell today with an EPS of .28/share (vs estimate for .27/share) on revenue of $243 million (vs the estimate for $234 million). That’s good for a bit of sequential growth, but the 2nd straight decline in growth quarter over quarter.
“Q4 results were in-line with our targets and we are encouraged by the 11% sequential growth in quarterly revenue,” stated Chuck Swoboda, Cree chairman and CEO. “Over the last fiscal year, we continued to have success leading the LED lighting revolution and growing our LED lighting business, while at the same time managing through a challenging business cycle for our LED component and LED chip product lines. As we look ahead to Q1, demand has improved from earlier in the calendar year and we are well positioned to continue to lead the LED lighting revolution.”
Looking ahead to this quarter, the company is forecasting EPS and revenue that is a bit below analyst estimates. The company sees EPS about inline with what they reported for last quarter at .25 – .28/share while analysts are looking for .31/share. They see revenues in the range of $245 – $255 million which is closer to the analyst estimate of $253 million.
While shares of CREE have been beaten down and really ramped up into the bell along with the overall market, I’m just not convinced this earnings report is strong enough to be the catalyst for a major rally.