Strong quarterly earnings strengthen Cree, LED market at large

Cree, one of the most formidable companies in the efficient lighting market, reported strong earnings for its fourth quarter ended June 28 — tallying $148.1 million in revenue, a 9 percent increase from last year. Net income also increased from $8.4 million to $9.7 million since 2008.

Also significant: for its full fiscal year, Cree brought in $567.3 million — a 15 percent uptick from the $493.3 million brought in last year, beating analyst predictions by a nose. Granted, net revenue fell from $33.4 million to $30.3 million for the year, but revenues from the previous fiscal year were inflated by the sale of investments. This is still a very strong performance for the company, which is actively diversifying its product base — mostly chips used in light-emitting diode systems — and growing steadily.

As a result, its stock jumped 8 percent this morning. This should add momentum to the Durham, N.C. company’s shifting strategy. It has started to focus on its manufacturing operations more than development, funneling funds into factories churning out its chips and other products in the U.S. and Asia. Based on these changes, and healthy trends, the company has predicted its first quarter revenue to land between $160 million and $166 million. But analysts are still looking a bit lower, forecasting $151.7 million.

Cree’s earnings report is good news for the rest of the LED and advanced lighting space, which will probably garner more attention as well now that the stock price has spiked. These companies are also benefiting from a more stable pricing environment for LED chip components.

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