3 Min Read
* Cuts Q3 revenue view to $215-$220 mln from $245-$265 mln
* Sees Q3 gross margin 43 pct vs prior view 46 pct
* Shares fall 11 pct in heavy volume
(Adds CEO quote on Japan, details; updates shares)
By Krishna Das
BANGALORE, March 23 (Reuters) - Cree Inc (CREE.O) cut its third-quarter revenue and margin view on higher customer inventories and lower-than-expected pricing, dragging the LED lighting maker's shares down 11 percent.
Supply of light-emitting diodes, used to light mobile phones and television screens, has jumped in recent times mainly due to generous subsidies in China.
"A lot of companies got to the point where their customers had more inventory. Our customers had more inventory than we had expected ... other people went through that same cycle," Chief Executive Chuck Swoboda said on a conference call.
Cree sees January-March revenue of $215-$220 million, compared with its earlier view of $245-$265 million. Analysts on average had expected $254.8 million, according to Thomson Reuters I/B/E/S.
Gross margin for the quarter is expected to be about 43 percent, down from its prior target of nearly 46 percent.
Durham, North Carolina-based Cree, however, is targeting revenue to increase 10-12 percent sequentially in the fourth quarter.
Swoboda said higher demand for lighting applications would be the main driver in the April-June quarter. "Several customers have recently revised their forecasts upwards for the fourth quarter."
The CEO did not see any immediate impact from the disaster in Japan.
"We do obviously have some suppliers, generally secondary or third on our list, and we're monitoring that ... a lot of people still evaluating what might happen over the next quarter or so," he said.
Cree shares were down 10 percent at $43.90 in morning trade on Wednesday on Nasdaq. The stock fell to $43.70, its lowest in little more than year, in early trade. Nearly 10 million shares changed hands, about three times their normal volume.
(Reporting by Krishna N Das; Editing by Maju Samuel, Unnikrishnan Nair)
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