What Can We Expect From Cree’s Q4’16 Earnings

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Cree

Leading LED manufacturer Cree (NASDAQ:CREE) is set to announce its Q4’16 results on August 16th. (Fiscal years end with June.) The company’s stock price has bounced back of late, after it fell by approximately 40% in between the months of March and May. A delay in new product launches and slower-than-expected demand for lighting products, coupled with a guidance miss, had significantly affected Cree’s stocksince the April earnings preannouncement. Further, lower than expected commercial orders for lighting products, due to service disruptions arising from an ERP system upgrade had added to the company’s problems in Q3.

Nevertheless, we can infer from Cree’s recent preliminary results for Q4 that it is past the service disruption challenges it faced in Q3’16 and it is likely to report healthy lighting revenues, which contributes to majority of its revenues. Furthermore, the company’s decision to sell its Wolfspeed Power and RF division to Infineon announced in the current quarter will help Cree become a more focused LED lighting company.

The company’s profitability in the LED business has been suffering from an excess supply and the resulting dramatic price reductions. The past year has been a tough journey for the LED industry, as margins have squeezed to a point where it has become increasingly difficult for a large number of companies to stay afloat. In the table below we can notice the revenue growth in the key segments as expected for Cree in Q4’16:

Preliminary_EarningsQ4

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See Our Complete Analysis for Cree Here

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