Cree Reports 22 Percent Revenue Increase In Q3
Strong performance of Wolfspeed business helped drive earnings per share
Cree has announced financial results for Q3 2019, ended March 31, 2019. Revenue from continuing operations for Q3 2019 was $274 million, which represents a 22 percent increase compared to revenue from continuing operations of $225 million for Q3 2018.
GAAP net loss from continuing operations for Q3 2019 was $22 million, or $0.22 per diluted share. This compares to a GAAP net loss from continuing operations of $10 million, or $0.10 per diluted share for Q3 2018. On a non-GAAP basis, net income from continuing operations for Q3 2019 was $20 million, or $0.20 per diluted share, compared to non-GAAP net income from continuing operations for Q3 2018 of $17 million, or $0.17 per diluted share.
As previously announced, on March 14, 2019, Cree intends to sell the Lighting Products business to IDEAL Industries. As a result, the results of the Lighting Products business have been classified as discontinued operations in the consolidated statements of (loss) income for all periods presented.
Additionally, the related assets and liabilities associated with the discontinued operations are classified as held for sale in the consolidated balance sheets. Unless otherwise noted, discussions herein relate to the company's continuing operations. The transaction is expected to close by the end of Cree's fiscal year 2019, subject to customary closing conditions and governmental approvals. The parties received early termination of the waiting period under the Hart-Scott-Rodino Act in April 2019.
“Our Wolfspeed business continued to post strong performance in the third quarter, which helped drive non-GAAP earnings per share above the top end of our range,” said Cree CEO Gregg Lowe. “We are also very pleased to have recorded gross margin improvements across the business while addressing some softness within our LED business. We are well positioned to meet the growing demand for next generation SiC solutions over the next five years that support a variety of mega trends including the auto industry's transition to electric vehicles and the rapid deployment of faster 5G wireless networks.”
Business Outlook:
For its Q4 2019 ending June 30, 2019, Cree targets revenue from continuing operations in a range of $263 million to $271 million. GAAP net loss from continuing operations is targeted at $19 million to $24 million, or $0.18 to $0.23 per diluted share. Non-GAAP net income from continuing operations is targeted to be in a range of $12 million to $17 million, or $0.12 to $0.16 earnings per diluted share.
