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Cree, Inc. (NASDAQ: CREE) preannounced its F3Q results, with the revenue and EPS below the guidance, driven by lower Lighting Product revenues.
Summit Research’s Srini Sundararajan maintained a Hold rating on the company, while lowering the price target from $30 to $25.
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F3Q Preannouncement
The company preannounced its F3Q revenue at $376 million, below the guidance of $400-$430 million. The GAAP and Non-GAAP EPS were also both below the guidance.
Sundararajan now expects the GAAP and Non-GAAP gross margin to come in below the guidance at 29.7 percent and 30.5 percent, respectively.
Reasons For Shortfall
While revenues from LED Products and Power and RF Products were in-line with the guidance, Lighting Products’ revenue came in 20 percent below the guidance, driven by lower commercial orders.
Sundararajan mentioned that the decline in commercial orders was due to “customer service disruptions related to CREE’s ERP system conversion, new product delays and a slower than forecast C1Q16.”
Cree Inc. attributed part of the shortfall to the impact of a stronger dollar on overseas sales, as well as the slowing in the retrofit market in the U.S.
According to the Summit Research report, “The updated results also include inventory write-down in LED tubes and the effect of lower factory utilization in Lighting products.”
Future Outlook
The company announced that the commercial lighting base order rate improved in March and that management was optimistic regarding this and an improvement in new product demand driving growth in F4Q.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.