What To Expect From Cree In Fiscal Q3

by Trefis Team
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Cree (NYSE:CREE) is expected to publish its Q3 FY’19 results over the coming weeks, reporting its first set of quarterly results since it announced that it would be divesting its lighting business. Below we take a look at some of the key trends to watch as the company publishes earnings.

Our interactive dashboard analysis on What to expect from Cree over Q3 FY’19 details Trefis expectations for the quarter. You can change our key drivers and forecasts to arrive at your own earnings estimates for the company, and see more Information Technology company data here.

What to expect from Cree in Q3 FY’19

  • Revenue from continuing operations of $274 million, down 23% year-on-year, due to the planned sale of the lighting business
  • Adjusted EPS of about $0.16

What are the key trends that will drive earnings?

  • Cree’s Lighting business – to be sold to Ideal Industries for ~$310 million by Q4 FY’19 – is classified as discontinued operations, impacting Cree’s financials year-over-year
  • Wolfspeed segment is likely to see revenue growth in the low single digits sequentially
  • LED segment revenues could decline marginally due to seasonality

What are the key trends to watch in the Wolfspeed business?

  • The Wolfspeed business – which manufactures Power and RF products – will benefit from stronger adoption of silicon carbide (SiC) and gallium nitride products (related: Why The Silicon Carbide Business Could Be A Big Growth Driver For Cree).
  • SiC is witnessing strong interest from electric vehicle manufacturers, who see a strong value proposition, considering its ability to handle high voltages efficiently
  • Cree had pipeline in excess of $1 billion for various applications associated with EVs, including silicon carbide MOSFETs, diodes and power modules, and we will be looking for further updates there.

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