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Local Tech Wire

DURHAM, N.C. – A sizzling financial performance in the first three months of this year was not enough for investors in Cree on Tuesday and Wednesday.

Buyers dumped (Nasdaq: CREE) in after-hours trading despite the strong quarter.

Shares dropped to $77.26, down $4.91 but then rallied. Late Tuesday night, Cree traded down $3.64, or 4.5 percent.

"Apparently, the Street wanted even more," wrote Eric Savitz at Barron’s.

The sell-off continued Wednesday morning. Just after 11 a.m., shares were down 7 percent to $76.19. At one point, shares fell as low as $75.11.

By the 4 p.m. close, Cree rallied a bit to finish at $76.22, down $5.95 or 7.2 percent.

The losses wiped out a gain of $2.10, or 2.6 percent, during regular trading Tuesday. The $82.17 closing price was close to Cree’s 52-week high of $83.38. Cree shares have soared nearly 50 percent so far this year based on the increasing demand for LED lighting.

Cree reported “record” revenues and profits for the first quarter of the year, which is its third fiscal reporting period.

Revenues soared 78 percent to $234 million compared to a year ago.

Profits, meanwhile, jumped to $44.6 million from $4 million for the same quarter in 2009.

The profit of 47 cents per share after removal of one-time expenses and adjustments topped analysts’ expectations of 44 cents.

For the next three months, Cree projected more revenue growth to between $255 million and $265 million.

“We achieved record revenue and net income again in Q3 due to a combination of strong LED demand and solid execution with our factory ramp,” Chuck Swoboda, Cree’s chairman and CEO, said in a statement. “The LED lighting revolution continues to gain momentum and we remain focused on extending our leadership position while we build the scale, cost structure and channels to win in the market.”

Cree’s gross margin also increased to 48.1 percent from 36.9 percent a year ago.

(Editor’s note: This story has been corrected to update information about Cree’s quarterly forecast.)