Cree Chair and CEO Chuck Swoboda takes advantage of Cree’s earnings report on Tuesday to brief Wall Street analysts about what he sees as the Durham LED-focused company’s future. He has called for a “Cree 3.0” after the recent decision to sell its Wolfspeed power/chip business.

Swoboda sees “highly competitive” challenges for LEDs and says the company must continue to innovate with new products, especially in what he calls “smart lighting.” He also sees possible mergers and acquisitions over the next fiscal eyar.

In his own words, what Swoboda sees, from a transcrpit provided by business news site SeekingAlpha:.

Cree 3.0

As we start fiscal 2017, we are focused on the company transition to Cree 3.0 and building the more valuable LED lighting Technology Company. We project the markets for commercial LED lighting products will expand in fiscal 2017 and provide a good environment to grow our lighting business. We target that our consumer LED bulbs and LED components businesses will be in a similar revenue range over the next year as these markets are expected to remain highly competitive. …

  • First, we are working to complete the sale of Wolfspeed to Infineon. …
  • Second, we are focused on driving top line growth for the new Cree … Over the next year we target growing core commercial lighting revenue from current levels in line with the market and potentially adding to that growth to product line expansion and some incremental lighting M&A in calendar 2017 …

For fiscal 2017, we are targeting consumer lighting revenue in a similar range as fiscal 2016 as we transition to our next generation premium LED bulb. …

  • Third, we are working to improve operating margins. …

We target company operating expenses to grow slower than revenue which should drive increased operating margin for the year. To enable our revenue and profit goals, we must continue to innovate in all business segments to differentiate our products in the market and improve the customer experience and service levels across the company.

Innovation is what makes Cree a leader in LEDs and lighting, and the customer experience is what enables us to build larger and more valuable company overtime. …

Even with the tremendous number of new products, we must continue to fill product gaps and develop new capabilities …

While the primary driver of lighting growth in the near to mid-term is selling LED based fixtures, we believe Smart Lighting and the related value added sensing and analytic capabilities is key to longer term growth.

Our SmartCast technology enables IoT capability and we are winning business today, but were early in the adoption cycle. And as an industry we are not yet providing the user experience and value added capabilities that will drive this in a mainstream applications longer term.

Read the full transcript of his remarks and the Cree (Nasdaq: CREE) earnings conference call at:

http://seekingalpha.com/article/4000090-cree-cree-charles-swoboda-q4-2016-results-earnings-call-transcript?part=single