Why Has Cree Lowered Its Q3 2016 Guidance?

April 6th, 2016 by Trefis Team
-22.09%
Downside
80.07
Market
62.38
Trefis
CREE: Cree logo
CREE
Cree

Leading LED products manufacturer, Cree lowered its Q3 2016 estimates due to lower than expected commercial orders for lighting products. The company’s previous and revised guidance for Q3 2016 are given below:

T1

The company is expecting a decline of 27% and 17% in lighting products on a sequential and year over year basis respectively.

T2

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This news sent the company’s stock down by more than 15% in after hours trading. This can be attributed to the fact that LED lighting is the most important division for Cree as it earns more than 50% of revenues from the segment.

Revenue Bdown

The company attributed the decline in LED lighting sales to customer service disruptions due to Cree’s ERP system upgrade and the delay in new product launches. However, the company remained confident about its growth in Q4, as it saw orders for new products picking up. Further, we believe that a strong growth in LED lighting market will lead the growth for Cree going ahead.

See the links below for more information and analysis about Cree:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Cree