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Cree Reports Eighteen Consecutive Quarters of Profitability Earnings Per Share Increased 125 Percent; Product Revenue Rose 70 Percent

Source: Cree Inc. (abridged version)

DURHAM, N.C. Cree, Inc. reported today record second quarter fiscal year 2001 revenue of $41,494,000, a 10 percent increase, sequentially, and a 67 percent increase over the $24,814,000 reported in the year ago period. Earnings per share rose 125 percent to $0.18, per diluted share, over the $0.08, per diluted share, reported in the comparable period in the prior year (as adjusted for the company s 2-for-1 stock split in December 2000). Net income increased 145 percent to $13,861,000 compared to $5,647,000 in the year ago period. Product revenue grew 70 percent on a year-over-year basis, and 10 percent, sequentially. Product margins for the second quarter were 57.0 percent compared to 57.8 percent reported in the first quarter of fiscal year 2001. Gross margins increased to 53 percent compared to 51 percent reported in the second quarter of fiscal year 2000. Operating margins were the highest in the history of the company at 40 percent compared to 39 percent for the first quarter of fiscal 2001 and 32 percent for the comparable quarter in fiscal 2000. Net margins for the quarter were 33 percent compared to 23 percent in the year ago period.

For the six-month period ended December 24, 2000, the company reported record revenue of $79,136,000, an increase of 73 percent over the $45,675,000 reported for the comparable period of the prior year. Net income rose 160 percent to $26,515,000 or $0.35 per diluted share, and compares with net income of $10,201,000, or $0.15 per diluted share, for the corresponding prior year period. Product revenue increased 78 percent for the six-month period over the year ago period.

``We are particularly pleased with our continued revenue and earnings growth and the fact that we have now reported eighteen consecutive quarters of profitability, said Neal Hunter, Chairman and Chief Executive Officer. ``Our strong financial performance results from our concentrated focus on expanding our market penetration through new product offerings as well as through acquisitions, strategic alliances and partnerships. We believe the acquisition of UltraRF will offer Cree significant opportunities to reduce the cost and increase the performance characteristics for the emerging radio frequency applications for wireless infrastructure. We have also made tremendous progress in the our blue laser efforts and the recent announcement of the Rohm alliance is expected to further aid in the development and commercialization of blue laser diodes for consumer applications.

North Carolina-based Cree, Inc. is the world leader in developing and manufacturing semiconductor materials and electronic devices made from silicon carbide. The company uses proprietary technology to make enabling compound semiconductors such as blue and green LEDs, SiC crystals used in the production of unique gemstones and SiC wafers that are sold for device production and research. Cree has new product initiatives based on its expertise in SiC, including radio frequency and microwave transistors for use in wireless infrastructure applications and radar, blue laser diodes for optical storage applications and high power devices for power conditioning and switching. For more information on Cree, visit http://www.cree.com.

This press release contains forward-looking statements involving risks and uncertainties that may cause actual results to differ materially from those indicated. Actual results could differ materially due to a number of factors, including uncertainty whether we can achieve our targets for increased yields and cost reductions needed to permit lower product pricing without margin reductions; risks associated with the production ramp-up for our new ultra bright LED chips, including the possibility of unexpected delays, increased costs and manufacturing difficulties or less than expected market acceptance; the risk of variability in our manufacturing processes that can adversely affect yields and product performance; uncertain product demand; concentration of our business among few customers; uncertainty whether our intellectual property rights will provide meaningful protection; the possibility of adverse results in our pending intellectual property litigation; and other factors discussed in our filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended June 25, 2000 and subsequent reports filed with the Commission.

 


Web site: http://www.cree.com
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