* Net income rose 47 percent in fiscal second quarter
* Results below expectations due to lower sales in Asia
* Q3 profit, revenue outlook below Wall St estimates
* Stock falls 15.2 percent in extended trade
(Adds LED background, competitors, byline, updates shares)
By Nichola Groom
LOS ANGELES, Jan 18 LED lighting maker Cree Inc
(CREE.O) reported a 47 percent rise in quarterly profit, but
its sales, profit and current quarter outlook fell short of
expectations because of lower sales in Asia, sending its shares
down 15 percent in after-hours trading.
Net income in the fiscal second quarter was $49.8 million,
or 45 cents per share, below the company's forecast calling for
earnings per share of 46 cents to 50 cents. A year ago, the
company earned $33.8 million, or 32 cents per share.
"Demand isn't fantastic right now in the marketplace and
things have softened a little bit," said Canaccord Genuity
analyst Jed Dorsheimer, who blamed an increase in manufacturing
capacity throughout the LED industry for the rise in
Dorsheimer said a new LED subsidy in China "will absorb and
then tighten the market again as we go through the middle of
Demand for light emitting diodes, which are used both in
lighting fixtures and in products like televisions and mobile
phones, has exploded in recent years as screens appear in more
devices and consumers seek out energy-efficient products to
save power and reduce harmful greenhouse gases.
The industry's rapid growth sent Cree shares up 425 percent
between the beginning of 2009 and April of 2010. But concerns
about falling prices and increased competition among LED makers
have seen the stock fall 25 percent as of Tuesday's close from
that last April's high.
The LED industry's major players -- and Cree's biggest
competitors -- include privately-held Nichia Corp of Japan,
Philips' (PHG.AS) Lumileds and Siemens AG (SIEGn.DE) unit
Excluding one-time items, Cree earned 55 cents per share.
On that basis, analysts had been expecting a profit of 58 cents
per share, according to Thomson Reuters I/B/E/S.
Revenue rose 29 percent to $257 million from $199.5 million
last year. The company had been expecting revenue of $270
million to $280 million. Analysts had been expecting $276.59
million, according to Thomson Reuters I/B/E/S.
For its third quarter, Durham, North Carolina-based Cree
said revenue would be similar to the second quarter, between
$245 million and $265 million. Analysts had been expecting
Earnings before items are expected to be between 38 cents
per share and 45 cents per share in the fiscal third quarter.
Analysts had been expecting earnings of 58 cents a share,
according to Thomson Reuters I/B/E/S.
The company said operating expenses will increase by about
$7 million due to spending on new product development.
"We are managing through an inventory correction in Asia in
the near term, but the opportunity in LED lighting has not
changed," Cree Chief Executive Chuck Swoboda said in a
Cree shares fell 15.2 percent to $53.20 in extended trade
after closing at $62.71 on Nasdaq.
(Reporting by Nichola Groom. Editing by Carol Bishopric and