TMCnet News
Cree revenue jumps, but expenses hit profit(News & Observer, The (Raleigh, NC) (KRT) Via Acquire Media NewsEdge) Apr. 23--LED lighting maker Cree reported surging sales Tuesday that beat Wall Street expectations but failed to brighten the bottom line. The Durham-based company makes light-emitting diodes, tiny silicon carbide chips that illuminate car dashboards, cell phones and signs. Recently it started selling lighting equipment as it tries to convert the residential and office market to LEDs, which are more energy efficient than incandescent and fluorescent bulbs. As part of that shift, sales of LED lighting components surpassed sales of LED chips for the first time in company history, Cree CEO Chuck Swoboda said Tuesday. The transition to components used for general purpose lighting also helped push revenue up 38 percent to $125 million in the three months ended March 30. "Overall we continue to ... drive the growth of our business through higher LED component sales," Swoboda said. He added that global momentum in demand for energy-efficient lighting and the company's recent acquisition of Morrisville-based LED Lighting Fixtures will increase sales growth in the months ahead. Despite Cree's third-quarter revenue surge, profit declined steeply because of nonrecurring expenses. Net income was $5.7 million, down from $21.1 million in the same period last year. On a per-share basis, earnings were 6 cents compared with 21 cents a year earlier. But much of the decrease came from patent litigation, stock compensation and other nonrecurring expenses. Excluding those items, Cree's profit rose to $12 million from $4.7 million in the year-earlier period, or to 14 cents from 6 cents on a per-share basis. Cree released its results after the close of regular stock-market trading. The shares fell 71 cents to close at $31.06 but declined sharply in after-hours trading. "While the company is showing tremendous top-line growth, none of it is transferring to the bottom line," said Harsh Kumar, an analyst with Morgan Keegan. He also said there was considerable confusion in how Wall Street interpreted the company's fourth-quarter guidance. Cree forecast fourth-quarter revenue of $129 million to $133 million for the quarter ending in June. While that surpasses the $128.3 million forecast by analysts, investors likely misunderstood how Cree factored its recent acquisition of LLF, Kumar said. Earlier Tuesday, Cree announced a partnership with N.C. State University and five other schools to begin using LEDs on their campuses. That followed a similar deal Cree has struck with several cities, including Raleigh, to convert parking garages, signs and some general lighting. LEDs are more expensive than incandescent and fluorescent lights, but they use less energy. Prices, however, are declining as the technology improves. [email protected] or (919) 829-8926 To see more of The News & Observer, or to subscribe to the newspaper, go to http://www.newsobserver.com. Copyright (c) 2008, The News & Observer, Raleigh, N.C. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |