Cree Revenues Set a Record, Prepares To Open New RTP Chip Facility
Posted April 20, 2006
DURHAM, N.C. — Cree
, a manufacturer of light-emitting diode and semiconductors, reported record revenues of $107.7 million for its fiscal third quarter ending in March.
However, the company warned that it would face additional costs pegged at 1 cent per share as it prepares to launch production at its new chip fabrication plant in Research Triangle Park. Cree added that it expected revenues to be slightly under the third quarter or as high as $110 and lower earnings.
The warnings send Cree stock sharply lower in after-hours trading.
Cree said it made a profit of $24 million, or 31 cents a share. Wall Street analysts had predicted a 26-cent profit. Cree noted its profits were boosted by a tax benefit of 5 cents per share.
Revenues increased 12 percent from the same period in 2005 and 2 percent from the previous quarter.
Cree (Nasdaq: CREE) closed at $34.09 on Thursday, down 41 cents. The quarterly results were announced after the markets closed, and Cree stock fell 8 percent, or $2.69, in after-hours trading.
"We are particularly pleased with the success of our XLamp (LED) products, which grew nicely in Q3, offsetting the seasonality in LED chip sales," said Chuck Swoboda, Cree's chairman and chief executive officer, in a statement.
Swoboda also warned that the fourth quarter is not likely to be as strong.
"The fourth quarter will be a transition quarter for Cree as we start production of our high power products in our new Research Triangle Park fab, which will add some additional operational expenses as well as one-time costs associated with the move," he said. "The combination of these investments and those we are making in R&D should put Cree in a strong position to grow our new products businesses."
Cree forecast revenues of between $106-$110 million in revenues and earnings of between 22-24 cents per share for the fourth quarter.
Cree announced a $300 million expansion plan in August of 2004 for the new plant and the creation of an additional 300 jobs.