Cree Rebounds

Shares of Cree fell nearly 6% late Tuesday after the company reported fiscal fourth-quarter results above Wall Street expectations but called for lower per-share profits in the fiscal first quarter. Cree said it lost $6 million, or 6 cents a share, in the fiscal fourth quarter, compared with a net loss of $11 million, or 11 cents a share, in the fourth quarter of fiscal 2016.

The stock price dropped from $23.04 to $21.33 late Tuesday, but rallied on Wednesday only to fall again on the same day.  Today, Friday, 25 AUG, the stock is set to open at $23.36--above where it was on Tuesday before reporting the loss.

It is a really good sign that Cree's stock has rebounded so well, so quick.  

A few highlights from Chuck Swoboda's call with investors:

  • In addition, we recently started shipping our first automotive LED components to a Tier 1 Ford lighting supplier. The automotive business is just getting started, but we're working on several projects that are forecast to turn on over the next 18 months.
  • Lighting sales grew slightly in Q4, led by solid growth in our U.S. C&I business. The growth in C&I offset lower sales in the contractor value segment of our business as well as seasonally lower consumer sales.
  • We're addressing the softness in our contractor value segment with our new C-Lite product line.
  • Wolfspeed revenue grew 25% year-over-year up to $221 million, and gross profit was $103 million for a 46.8% gross margin.
  • LED Products revenue grew 9% sequentially to $143 million and was above our targeted range due to solid customer demand. Gross profit increased 15% sequentially to $37 million for a 25.9% gross margin, a 120 basis point sequential increase. The gross profit and margin increase was primarily due to product mix.
  • I would say that M&A in lighting is something we've been working on. We have a pipeline. We really have been hesitant to push that pipeline over the last few quarters because, really, we were focused on giving Danny a chance to get the team in place and really start to improve some of the basic service levels and build some momentum with the channel before we went down that path.