Cree Inc (CREE.O) forecast current-quarter profit below analysts' estimates, saying sales of its high-margin light emitting diode (LED) products are expected to remain at similar levels to those in the fourth quarter, sending its shares down 16 percent.
The lighting manufacturer, which is chasing a long-term goal of pushing all its customers to upgrade to LEDs, reported a fourth-quarter profit in line with analysts' estimates.
For the current quarter, Cree expects adjusted earnings of between 36 and 41 cents per share and revenue of $380 million to $400 million.
Analysts on average were expecting earnings of 43 cents on revenue of $398.4 million, according to Thomson Reuters I/B/E/S.
The gross margin in LED products division rose to 45.7 percent from 39.1 percent a year earlier. The division makes LED components, LED chips and Silicon Carbide materials.
The share of LED products business in its revenue fell to 58 percent for the year ended June from 65 percent in the previous year.
Cree expects "solid growth" in lighting for the first quarter, driven by LED fixtures and LED bulbs.
(Reporting By Thyagaraju Adinarayan; Editing by Sreejiraj Eluvangal)