Cree first-quarter net income up 26 percent
DURHAM, Oct 17, 2012 (The Herald-Sun - McClatchy-Tribune Information Services via COMTEX) --
Durham-based LED lighting company Cree Inc. reported net income growth of 26 percent in the first quarter of its fiscal year to reach $16.1 million, as well as what the company's chief executive said were record revenue results.
The company reported revenues for the quarter of $315.8 million, which were up 17 percent compared with the quarter last year and within the company's targeted range. Chuck Swoboda, Cree's chairman and CEO, said in a prepared statement that the company saw record revenue in the quarter.
The company's earnings per share in the quarter came in at the high end of its target range, said Mike McDevitt, the company's interim chief financial officer, in Tuesday's conference call about the company's financial results. The company reported earnings per share at 14 cents per share for the quarter.
"Our results are beginning to demonstrate the enormous leverage we have in our fully integrated vertical lighting model," Swoboda said in the statement.
Cree Inc. makes LED lighting fixtures and bulbs, and is also a supplier of LED chips and components. Last year, Cree acquired Wisconsin-based Ruud Lighting, a company said to be a leader in outdoor lighting that could complement Cree's LED lighting lineup.
Ben Schuman, an analyst for Pacific Crest Securities in Portland, Ore., said part of what analysts were looking to see on Tuesday was if the company has moved beyond disruptions caused by the acquisition of Ruud Lighting, among other matters.
He added that he believes the "jury is still out" on Cree's ability to capitalize on the growth of LED lighting in general. He said most people believe LED lighting is going to be a high-growth sector in the next several years, but he said the "big question" is whether LED vendors can make a significant profit margin.
"Or, in the case of Cree, if it can defend its profit margins, which have been historically much higher than the competition's," he said. "We don't have a lot of confidence either way, especially because Cree's business is evolving so rapidly from being a chip supplier to being a lighting manufacturer."
In response to an analyst question about the impact of the company's acquisition of Ruud on competitors that it also supplies to, Swoboda said he believes the company has "kind of moved beyond that at this point."
"There were some customers that raised (concerns)," Swoboda said, adding that he believes there's been a shift to focus on the merits of Cree's products.
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