Cree Misses, Issues Weak Guidance

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 |  About: Cree, Inc. (CREE)
by: Tate Dwinnell

The LED leader Cree Inc (NASDAQ:CREE) continues to have a bit of a tough go in earnings season, missing analyst estimates and issuing weak guidance once again. The company reported a non GAAP EPS of .25/share on revenues of $304 million. It wasn’t an awful quarter with the company missing estimates by a small margin and posting quarter over quarter growth of 18%, but traders don’t like the guidance sending shares down nearly 5% in after hours trading.

CEO Chuck Swoboda acknowledged the LED market remains challenging, but that the company strategy is working.

"Our second quarter results demonstrated the strength in our expanded lighting product line with strong growth in sales of both indoor and outdoor products," stated Chuck Swoboda, Cree chairman and CEO. "While the business environment remains challenging, our results demonstrate that our strategy is working. Our future business outlook remains very optimistic based on our belief that innovation drives payback, payback drives LED lighting adoption and adoption expands the market for both Cree and our customers."

Looking ahead to next quarter, the company is guiding below analyst estimates with an estimated non GAAP EPS of .18 – .25/share on revenues of $290 – $310 million. That compares with the analyst estimate of .30/share on revenue of $321 million. The guidance is the reason shares are down after hours.

Technically, shares of CREE remain weak and in a firm downtrend, continuing to trade below the 50 day moving average. While CREE is a tremendously promising company in a promising industry I don’t see any reason (at least technically) to jump into shares quite yet.

Disclosure: None