By WRAL Tech Wire

DURHAM, N.C. – Cree Inc.’s (NASDAQ: CREE) fiscal third-quarter profit fell 50 percent on higher overhead costs and weaker-than-expected sales, according to regulatory filings on Tuesday.

Analysts expected decreased profits on Tuesday. But, despite this, they are generally optimistic about the stock.

For the current quarter, the manufacturer forecast a downbeat adjusted per-share profit between 20 cents and 26 cents, with $295 million to $315 million of revenue. Analysts polled by Thomson Reuters were looking for 28 cents and $323 million, respectively.

Shares were off 8.2% at $29.27 in after-hours trading.

The maker of light-emitting diodes and electric components has posted weaker results in recent quarters on softer demand and a glut in the LED market. As a result, Cree recently halved the cost of its LED streetlights in hopes the lower prices will sway local governments to adopt the new technology.

Chairman and Chief Executive Chuck Swoboda said in a statement that backlog was stronger than it was a year ago and that many of its segments were tracking ahead of the fiscal second-quarter.

For the quarter ended March 25, the company reported a profit of $9.5 million, or 8 cents a share, down from $18.9 million, or 17 cents a share, a year earlier. Excluding certain items, earnings fell to 20 cents from 27 cents. Revenue increased 30% to $284.8 million.

The company in January projected 18 cents to 25 cents a share in earnings on revenue of $290 million to $310 million.

Gross margin narrowed to 34.9% from 41.7% due to higher revenue costs. Overhead expenses climbed 33%.

Over the past year, the stock has hit a 52-week low of $20.25 and 52-week high of $44.83. Cree stock has been showing support around $30.70 and resistance in the $32.98 range. Technical indicators for the stock are bullish.

While the company has been profitable for the last eight quarters, income has fallen year-over-year by an average of 68.5 percent over the past four quarters. The biggest drop came in the first quarter, when profit dipped by 77.9 percent.