DURHAM – Cree (CREE) on Wednesday reported a loss of $37.8 million in its fiscal first quarter, but its CEO saw positives in the quarterly financials even as Cree’s chief financial officer noted that the company is continuing to suffer from the China trade war fallout.

“The transformation of Cree continued during the quarter and we delivered results that met or exceeded the upper end of our ranges,” said Gregg Lowe in a statement.

“While we will continue to experience some near-term headwinds, we are continuing to build our long-term prospects as customers look to leverage the benefits of our silicon carbide and GaN solutions to drive innovation.”

However, Wall Street wasn’t necessarily impressed.

StreetInsider reported that JPMorgan analyst Paul Coster downgraded Cree (Nasdaq: CREE) from Neutral to Underweight and lowered the stock target price to $40 from $43.

Cree shares traded down slightly before the markets open Thursday.

In a conference call with analysts, CFO Neill Reynolds cited continuing challenges in the China market.

“This marks the third consecutive month of weaker automotive sales trends in China,” Reynolds said.

“In our RF [radio frequency] business, in addition to Huawei, we are seeing some push outs and delays in purchasing activity as it relates to the rollout of 5G networks.”

Cree said it is observing US law in dealing with Huawei which the US has targeted for technology restrictions.

On a per-share basis, the Durham-based company said it had a loss of 35 cents. Losses, adjusted for stock option expense and non-recurring costs, were 3 cents per share.

The results beat Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for a loss of 5 cents per share.

The maker of energy-efficient lighting posted revenue of $242.8 million in the period, also surpassing Street forecasts. Five analysts surveyed by Zacks expected $240.1 million.

For the current quarter ending in January, Cree expects its results to range from a loss of 11 cents per share to a loss of 7 cents per share.

The company said it expects revenue in the range of $234 million to $240 million for the fiscal second quarter. Analysts surveyed by Zacks had expected revenue of $244.7 million.

Cree shares have risen 12% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $48.12, a climb of 26% in the last 12 months.