Boston, MA 08/13/2014 (wallstreetpr) – Manufacturer of semiconductor materials and devices, Cree, Inc. (NASDAQ:CREE) had provided outlook for the first quarter that fell too short of the Wall Street analysts’ estimations. The big concern among the investors’ is the weak adjusted operating margin in the first quarter, which the company had disclosed, would be similar to that of the fourth quarter.
Outlook
Cree, Inc. (NASDAQ:CREE) expects GAAP net income of $30 – $37 million or earnings of 25 – 30 cents a share for the first quarter of the fiscal year 2015. On an adjusted basis, it projects net income of $48 – $55 million or earnings of 40 – 45 cents a share. The mid-point of 43 cents a share fall short by tree cents a share when compared with the Street analysts’ predictions of 46 cents a share.
Cree projects revenue of $440 – $465 million for the same period, which was also short of the Street analysts’ estimation of $469.78 million. The company expects GAAP and non-GAAP gross margin of 36.9%+ and 37.5%+ respectively while estimating adjusted operating margin similar to that of the fourth quarter.
4Q Results
Cree, Inc. (NASDAQ:CREE) reported net income of $29.85 million, up 6% from $28.24 million and the earnings rose modestly to 24 cents a share from 23 cents a share in the prior year quarter. On an adjusted basis, it would have earned a profit of $51.29 million or 42 cents a share, 12% higher than $45.65 million or 38 cents a share in the year-ago quarter.
Cree’s top line advanced 16% to $436.29 million from $375.01 million in the previous year quarter.
Other Metrics
While gross margin on a GAAP basis slipped 30 basis points to 37.2% from 37.5%, non-GAAP gross margin also experienced a similar pattern to fall to 37.9% from 38.2% in the same quarter last year. However, it had indicated that it could witness ten basis points improvement in adjusted gross margin sequentially.
Similarly, Cree, Inc. (NASDAQ:CREE)’s GAPP operating margin dipped to 7.3% from 8.2% while adjusted operating margin slipped to 13.1% from 13.7% in the fourth quarter of 2013.
