Cree Inc. shares dropped 9 percent in the extended session Tuesday following Cree’s updated forecast of adjusted earnings of 4 cents to 10 cents for the second quarter on revenue of $310-330 million, while analysts expected 16 cents and $336 million, though the firm beat Q1 earnings estimates.
The Durham-based company reported adjusted first quarter earnings from continuing operations of 15 cents a share on $321 million in revenue that topped forecasts. Analysts had predicted 13 cents a share earnings on $364.8 million in revenue.
In a conference call following the earnings report, Cree CEO Chuck Swaboda said, “Lighting, LED and Wolfspeed, all delivered revenue and gross margins that were in line with our targets, while operating expenses were lower than targeted.”
He also said the it would take time to “Rebuild older momentum” and the company was putting additional lighting acquisitions on hold as it does.
The earliest new acquisition deal could happen by the second half of 2017 if the company closes the sell-off of its radio-frequency and power business, Wolfspeed to Infineon.
The deal is expected to close by the end of the year, but the U.S. Federal Trade Commission asked the companies for more information in September.
For the time being, he said new management such as lighting exec
Daniel Castillo will have to focus on existing lighting operations and reconnecting to channel partners.
The lighting unit released 11 new products in 2016 and brought in $183.8 million in revenue. Swaboda said the company plans to keep expanding its lighting product portfolio.
“We made progress improving lighting margins in both our commercial and consumer product lines in the quarter. Customer service levels improved with good on-time delivery and better lead times, Swaboda said, adding,” This improved level of customer service, combined with the new products we released in Q4, has resulted in increased lighting project coating activity, which is a good indicator of future demand.”
Cree (Nasdaq:CREE) shares closed at $25.20 Tuesday and fell 9 percent to $22.90 in the extended session, bucking a trend of gains in after hours trading following its earnings reports.
