Cree's Q3 Miss Highlights Lighting Segment's Challenging Recovery

Cree, Inc. CREE is suffering a significant decline after reporting its first quarter results on Tuesday.

Shares are down sharply after issuing a lower than expected forecast over the next quarter. The company's lighting segment has been behind management's initial expectations.

Deutsche Bank is concerned about another round of number cuts, and a lack of positive catalysts until the company's lighting segment growth resumes.

First quarter revenues and EPS were at the high end of the range driven by strong performance of the LED segment and lower operating expenses.

A bright spot for Cree is that the company is seeing increased project quoting activities from the 11 new products it has launched this year.

Deutsche Bank maintains a Hold rating on Cree, but lowered its price target to $22, down from $26.

Cree shares were down 11.35 percent to $22.34 on Wednesday.