Cree Boosts Guidance on New LED Bulb

Light emitting diode manufacturer Cree CREE raised its fiscal third-quarter guidance prior to the opening bell on Tuesday. The updated guidance comes in the wake of the company's launch of a new series of LED bulbs which will retail for less than $10. The new bulb will be significantly energy efficient and are backed by a 10-year warranty. The exclusive distributor for Cree's new LED light bulb will be Home Depot HD. "Over the last couple of years we recognized that the consumer is instrumental in the adoption of LED lighting, but we needed to give them a reason to switch. We believe this breakthrough LED bulb will, for the first time, give consumers a reason to upgrade the billions of energy-wasting light bulbs," Chairman and CEO Chuck Swoboda said in a statement. During Tuesday's trading session, CREE was trading up around 15 percent around mid-day. The stock has now gained almost 90 percent over the last six months and is up better than 50 percent in 2013 alone. At current levels, the Durham, North Caroline-based company has a market cap of around $6 billion. The new light bulb series from Cree could be a game changer for the company. The bulbs will range in price from $9.97 to $13.97 and will be 84 percent more energy efficient than a traditional light bulb. They will also last around 25 times longer than a typical incandescent light bulb. For the fiscal third-quarter, Cree now sees adjusted earnings per share of $0.31 to $0.36 versus its previous guidance of $0.30 to $0.35. This is ahead of current consensus estimates of $0.33. Revenue is now expected to be between $335 million to $350 million, ahead of the company's prior estimate of $325 million to $345 million. Currently, Wall Street analysts have consensus revenue estimates of $336.06 million. Cree guided also guided for adjusted gross margin of 39.5 percent and said that its operating expenses would be $2 million above prior expectations due to the new product launch.