Sterne Agee Not Expecting Surprises From Cree March Quarter Results

According to Sterne Agee, Cree CREE will report its March quarter results on Tuesday, April 19, after the market close. Sterne Agee reported that it does not expect any significant surprises for the March quarter results. “We have clearly underestimated the negative impact of weakening demand on Cree's revenues and margins. In our view, with so much bad news taking place over the past 12 months, in the worst case, the stock is a Neutral. However, given the magnitude of the growth opportunity, our belief that gross margins can go back to the mid-40s with the upcoming wafer transition, and our view that EPS growth goes back to 50%-60% range, we are sticking with our Buy rating.” Cree closed yesterday at $41.27.