LED maker Cree forecasts disappointing profit; shares fall
(Reuters) - Cree Inc (CREE.O), a maker of light-emitting diodes, forecast current-quarter earnings below analysts' average estimate as it expects higher marketing expenses for its LED bulb, sending its shares down about 15 percent in extended trading.
Cree expects second-quarter operating expenses to increase by about $5.5 million.
The company said it expects earnings of 36 cents to 41 cents per share. Analysts expected 44 cents per share, according to Thomson Reuters I/B/E/S.
"Gross margin guidance was weaker than expected due to a faster-than-expected ramp of lower-margin LED bulbs at Home Depot," Sterne Agee & Leach analyst Andrew Huang said.
Cree, which sells LED bulbs that lasts 25 times longer than a regular bulb, has been selling the product through a retail partnership with Home Depot Inc (HD.N).
Cree's net income almost doubled to $30.5 million, or 25 cents per share, in the first quarter ended September 29, from $16.1 million, or 14 cents per share, a year earlier.
Excluding items, the company earned 39 cents per share, in line with average estimate.
Revenue rose 24 percent to $391 million, missing the estimated $392.3 million.
The North Carolina-based company's shares, which have more than doubled this year, fell to $62.90 in extended trading.
(Reporting by Devika Krishna Kumar, Supantha Mukherjee in Bangalore; Editing by Ted Kerr and Don Sebastian)