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UPDATE 1-LED maker Cree forecasts disappointing profit; shares fall
October 22, 2013 / 10:49 PM / 4 years ago

UPDATE 1-LED maker Cree forecasts disappointing profit; shares fall

* Expects adj 2nd-quarter profit $0.36-$0.41 per share

* Expects 2nd-quarter revenue $400 mln-$420 mln

* Expects 2nd-quarter operating expenses to rise by $5.5 mln

* Shares fall 15 pct in extended trading (Adds details, analyst comment; updates share move)

Oct 22 (Reuters) - Cree Inc, 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.

Cree’s net income almost doubled to $30.5 million, or 25 cents per share, in the first quarter ended Sept. 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)

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