The Gory Details on Cree's Double Fumble

Cree (NAS: CREE) reported earnings on Jan. 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 25 (Q2), Cree missed slightly on revenues and missed on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Cree reported revenue of $304 million. The 28 analysts polled by S&P Capital IQ predicted a top line of $310 million. Sales were 18% higher than the prior-year quarter's $257 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.25. The 28 earnings estimates compiled by S&P Capital IQ averaged $0.26 per share on the same basis. GAAP EPS of $0.10 for Q2 were 78% lower than the prior-year quarter's $0.45 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.7%, 1,240 basis points worse than the prior-year quarter. Operating margin was 4.3%, 1,740 basis points worse than the prior-year quarter. Net margin was 4.0%, 1,540 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $300 million. On the bottom line, the average EPS estimate is $0.21.

Next year's average estimate for revenue is $1.2 billion. The average EPS estimate is $.98.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,114 members out of 1,204 rating the stock outperform, and 90 members rating it underperform. Among 251 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 235 give Cree a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cree is outperform, with an average price target of $35.09.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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