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Why Cree, Inc. (NASDAQ:CREE) Lowered Its Revenue Projection?

Boston, MA 10/03/2014 (wallstreetpr) – Cree, Inc. (NASDAQ:CREE)’s stocks declined by more than 12% on Thursday’s trading session after the company lowered its profit and revenue guidance for 1Q2015. It expects the revenues to come at $428 million compared to the initial forecast of $440 million to $465 million. The LED products revenue is anticipated 20% lower compared to a year ago. It is even expected to decline by 13% on a sequential basis to $174 million.

The lower global demand is the reason behind the lower LED projected revenues. However, the lightning product segment is expected to grow 51% is expected to grow 7% on a sequential basis to $223 million. The growth in LED fixtures and bulbs segment will support the Cree’s financial performance in 1Q2015.

The preliminary estimates

Cree, Inc. (NASDAQ:CREE) expects the GAAP earnings to come below the previously announced range of $0.25 to $0.30 per diluted share. The revenues will decline sequentially for direct as well as distribution customers. Cree expects the RF products and power revenue to grow by 24% year-over-year. It expects 8% sequential growth in RF products and power revenue segment.

The impact will be negative in the overall gross margins. It is expected to come lower than the previous forecast. The product mix will lead to lower gross margins in lightning products and LED products segment. However, Cree expects operating expenses to come lower than previous forecasts.

The other announcements

In the first quarter 2015, Cree, Inc. (NASDAQ:CREE) offered the share repurchase program under which it repurchases 1.2million shares at an average price of $45.22 per share. It accounted for the cash utilization of $54.3 million. The stock repurchase program is open till June 28, 2015 and is left with $146.0 million cash to complete the program. Cree also said that order visibility in second quarter 2015 remains limited and will stay unchanged from the first quarter.

Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at [email protected] or follow Nicholas Kitonyi @nmaithyak on Twitter.

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