Cree Profit Surges, Sees Weak Q2; Shares Plunge 15%

(RTTNews) - Cree Inc. (CREE) on Tuesday said its first-quarter profit surged from a year ago, driven by a 24 percent increase in revenues and stronger gross margins. Earnings for the quarter came in line with Wall Street estimates, but revenues fell short of expectations.

The energy efficient lighting products maker also detailed its outlook for the second quarter with earnings indicated to miss estimates and revenues expected in line. Following the news, shares of Cree plunged 15 percent in after-hours trade.

Durham, North Carolina-based Cree's first-quarter profit surged to $30.50 million or $0.25 per share from $16.12 million or $0.14 per share last year.

Adjusted earnings for the quarter rose to $0.39 per share from $0.27 per share a year ago. On average, 20 analysts polled by Thomson Reuters expected a profit of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Cree's revenues for the first quarter grew 24 percent to $391.01 million from $315.75 million a year ago. Analysts expected revenues of $392.31 million for the quarter.

Gross margin for the quarter improved to 38.6 percent from 36.8 percent last year.

LED products revenue rose 16 percent, while lighting products sales jumped 37 percent. Power and RF products revenues rose 24 percent.

Chief Executive Charles Swoboda said, "The strong performance was primarily due to increased sales of our lighting products, higher gross margins and improved operating leverage across the business."

Looking forward to the second quarter, Cree sees earnings of $0.21 to $0.26 per share, adjusted earnings of $0.36 to $0.41 per share and revenues of $400 million to $420 million. Analysts currently expect a second-quarter profit of $0.44 per share on revenues of $414.29 million.

CREE closed Tuesday's trading at $74.32, up $0.92 or 1.25%, on the Nasdaq. The stock, however, plunged $11.28 or 15.18% in after hours trade.