What To Expect From Cree’s Q1 Earnings
Leading LED manufacturer Cree (NASDAQ: CREE) is set to announce its fiscal Q1 results on Tuesday, October 17. The company has seen its top line and profitability decline drastically in the last few years, owing to fierce competition in the LED industry, which has suppressed LED prices as well as Cree’s market share. However, it is worth noting that Cree’s performance, in terms of both revenues and margins, did dramatically improve in Q4 on a sequential basis. This comes as a source of respite for management, which is expecting a turnaround in its business in the upcoming quarters. The company expects revenues between $353 – 367 million in Q1, with the midpoint indicating a 12% year-over-year increase. Lighting revenues are likely to be to be lower than the previous quarter, primarily due to seasonality.
Factors That Could Help Drive Growth In The Future
– Building capacity in the Wolfspeed business: Cree is working on increasing its capacity and further developing the technology to support longer-term growth opportunities in silicon carbide materials, silicon carbide power devices and modules, and gallium nitride RF devices. The company is seeing significant demand in silicon carbide and is currently working on improved capacity.
– Expanding LED product portfolio: Cree is expanding its LED product offering with new high-power and mid-power products that leverage its market leadership. The company has entered into a joint venture with San’an, which can help Cree increase its presence in the mid-power LED component market.
– Growing Lighting revenue and increasing margins: The company is looking to boost revenues and margins by investing in channel relationships, improving execution, and continuing to deliver innovative lighting solutions.
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