Cree Profit Tops Estimate; Revenue Falls Short; Outlook Weak

(RTTNews) - LED and lighting products maker Cree, Inc. (CREE) said Tuesday after the markets closed that its fourth quarter profit rose a modest 6% from last year, as higher costs and expenses dented a 16% revenue growth.

The company's quarterly earnings per share, excluding items, just managed to beat analyst' estimate, but its quarterly revenue fell short of analysts' forecast. At the same time, the company forecast first quarter revenue and earnings below analysts' current consensus estimate.

Cree shares are currently losing 6.48% in after hours trading after closing the day's regular trading session at $49.20, down 49 cents. The shares trade in a 52-week range of $44.52 to $76.00.

For the fourth quarter ended June 29, 2014, the Durham, North Carolina-based company reported net income of $29.8 million or $0.24 per share, compared to $28.2 million or $0.23 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $51.3 million or $0.42 per share, compared to $45.6 million or $0.38 per share in the prior year quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.41 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter narrowed to 37.2% from 37.5% a year ago, while adjusted gross margin for the quarter shrank to 37.9% from 38.2% last year.

Operating margin for the quarter narrowed to 7.3% from 8.2% a year ago, while adjusted operating margin shrank to 13.1% from 13.7% last year.

Net revenue for the fourth quarter rose 16% to $436.29 million from $375.01 million in the same quarter last year. Seventeen analysts had a consensus revenue estimate of $444.11 million for the fourth quarter.

LED products revenue for the quarter fell 8% to $199.5 million, while lighting products revenue surged 56% to $208.2 million and Power and RF products revenue rose 19% to $28.6 million.

Looking forward to the first quarter, the company forecasts revenue of $440 million to $465 million, net income of $30 million to $37 million, or $0.25 to $0.30 per share, and adjusted net income of $48 million to $55 million, or $0.40 to $0.45 per share. Analyst currently expect the company to earn $0.4 per share on revenue of $469.78 million for the first quarter.