Cree (Nasdaq: CREE) is making its new LED bulbs right here in North Carolina, and if the energy-friendly, long-lasting alternatives to conventional lighting prove popular to consumers then the Durham-based firm is likely to add even more jobs.

So says Gary Trott, vice president for product management at Cree.

Note: This story is being offered free of charge for a limited time. WRALTechWire Insiders will have access to exclusive, selected content like this soon.

Cree already has hired 200 people to make the bulbs locally, and the LEDs are made in N.C. as well, Trott told WRAL News in a telephone interview from New York City. Cree employs some 2,300 people in the Triangle, according to the Triangle Book of Lists.

Trott was part of the Cree executive team, which included Chairman and CEO Chuck Swoboda, who traveled to the Big Apple to brief analysts about the new lineup of bulbs that start at $10. The bulbs will be sold exclusively at Home Depot.

Cree also launched a trademarked branding campaign: “Biggest thing since the lightbulb.”

At the same time Cree also raised financial guidance.

Cree said revenue for the fiscal third quarter ending March 31 will be from $335 million to $350 million, up from a January forecast of $325 million to $345 million. The average estimate of 25 analysts surveyed by Bloomberg is $336 million.

The company also raised its earnings target to 31 cents to 36 cents a share, from 30 cents to 35 cents, compared with the 33-cent average estimate, Bloomberg news noted.

The news struck a chord with Wall Street investors, who bought Cree shares at a frenzied rate. By noon, CREE rose 16 percent to a new 52-week high of $52.35 in heavy trading. 

Shares finished the day at $51.16, up $6.44.

Trading was extraordinarily heavy with 13.7 million shares changing hands. The daily average is 1.98 million.

Goldman Sachs quickly reiterated its “Buy” rating on Cree but raised its share price target to $48 from $46.00.

“We view the price points as very competitive, especially considering an industry-leading 10-year warranty and technology featuring Cree’s high-power LEDs,” said Goldman Sachs analyst Brian Lee, according to Street Insider.

Cree spent months researching the price point at which the firm could realize a goal dating back to its founding by graduates of N.C. State in 1987:

Put LED lights in every home instead of short-lived, hot, energy-burning incandescent and other lighting.

Trott pointed out how Cree developed proprietary technology in building a bulb around a tower of LEDs mounted on a “Filament Tower.” While mimicking a traditional bulb’s filament, the LEDs provide as much “warm” light at a fraction of the power costs and with minimal heat.

“You can burn your fingers on the glass of a regular bulb,” Trott explained. “If you touch ours, it’s warm, which is proff the heat dissipation technology that protects the LEDs is working.” 

At under $10 for a 40-watt replacement and higher prices for 60-watt substitutes, Cree has hit the sweet spot, Trott believes.

“This is really an exciting day,” Trott said. “To go into the consumer space is huge.

“These light up like a light bulb.

“They perform better,

“And it looks light a light bulb.

“Our goal is to replace every incandescent bulb we can – 100 percent.”

The new bulbs include:

  • A 40-watt replacement for $9.97
  • A 60-watt replacement for $12.97
  • A 60-watt “day light” replacement for $13.97

While Cree has offered a 6-inch down-light at Home Depot, the bulbs announced Tuesday are the first that truly look like traditional lighting.

The LEDs are environmentally friendly, too. They not only use a smidgen of the electricity that incandescents use, they also don’t contain the mercury found in so-called CFL lights.

At $10, Trott said its research found that consumers will realize the payback for the new bulbs is one year and thus they will buy.

Each bulb also comes with a 10-year guarantee.

“The goal was to get people to want to try them,” Trott explained. “They realize they are not taking too much of a risk.”

 Trott has worked with Cree since 2008 when Cree acquired Triangle-based LED Lighting Fixtures, a company launched by former Cree CEO and co-founder Neal Hunter.

“It is pretty awesome to be part of this thing,” Trott said. 

In addition to the technology and the product, he also said Cree executives are glad to be bringing jobs to North Carolina.

“Management is now able to bring manufacturing jobs to North Carolina,” he said. “It’s not a default choice to build them in China.

“The LEDs are built here, the bulbs are assembled here and they are shipped right to Home Depot.”