Seeking Alpha

Cree's FQ2 guidance disappoints, margins remain under pressure

Cree (CREE) is guiding for FQ2 revenue of $400M-$420M and EPS of $0.36-$0.41, largely below a consensus of $414.3M and $0.44.

FQ1 gross margin was 38.6%, 40 bps Q/Q and +180 bps Y/Y, but below a guidance midpoint of 39%. It's the second quarter in a row (previous) Cree, which has received both a top-line boost and a margin hit from the sale of cheaper LED bulbs through Home Depot and other retail channels, has missed its gross margin guidance midpoint.

LED product (component) sales +16% Y/Y and 56% of revenue (was 58% in FQ4). Lighting products sales (inc. LED bulbs) +37% Y/Y and 38% of revenue (36% in FQ4). Power/RF products +24% and still 6% of revenue.

LED products gross margin was 46.6% (=90 bps Q/Q), lighting products 26.9% (+180 bps), Power/RF 53.7% (unchanged).

CREE -11.5% AH. VECO -2.1% in sympathy. CC at 5PM ET.

FQ1 results, PR

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Comments (2)
    , contributor
    Comments (21) | Send Message
    Once again, they hyped their own story (stock) and led investors into 10$+ sharp declines. How many times can they get away with this? Is their PR team off the rails and kissing the CREE management's _____?
    22 Oct 2013, 04:38 PM Reply Like
  • riotango07
    , contributor
    Comments (69) | Send Message
    I totally agree!
    Glad I bought last summer after the last down turn from the quarterly report ($53) and then sold earlier this month ($72) for a nice tidy profit.


    Back down to $63 so far in after hours.


    I think I'm done with this company with all their hype. Time to focus on more 3D printing!
    22 Oct 2013, 07:05 PM Reply Like
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