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Cree LED leads 3Q FY Revenue to 78% increase

Over half of LED sales are based on general lighting. Quarterly Net income increases over tenfold to $44.6 Million

Cree, Inc. (CREE 82.17, +2.10, +2.62%), a provider of numerous LED lighting solutions announces a record revenue of $234.1 million for its third quarter of fiscal 2010, ended March 28.

They report a 78% increase when compared to revenue of $131.1 million reported for the third fiscal quarter 2009 and a 17% increase compared to the second quarter of fiscal 2010. The conference call was hosted by Raiford Garrabrant, Director of Investor of Relations and Chuck Swoboda, Chairman & CEO of Cree. The comments include:

Regarding Orders for LEDs

“General Lighting is over half , I don’t have a specific percentage, but it’s grown past the half-way point last quarter and it’s probably getting close to someway between a half and two-thirds.”

With respect to LED newcomers

“Obviously we are well aware of the new entrants and their investments and clearly today, specifically, some of the large Korean players have really focused on serving their own needs from a back letting stand point but they’re all pretty clear that they see lighting as another market opportunity for them so we fully expect that they will build products and look at this market. If not in the short term, then over the mid-term.”

“With that being said, we think what we have seen so far with lighting is the very regionalized market; there are thousands of customers in each region and a product differentiation required to solve specific problems and to drive the dynamic.  We take them very seriously.”

"We achieved record revenue and net income again in Q3 due to a combination of strong LED demand and solid execution with our factory ramp. The LED lighting revolution continues to gain momentum and we remain focused on extending our leadership position while we build the scale, cost structure and channels to win in the market."

The figures are below:

 

Q3 2010 Financial Metrics:

Third Quarter (in thousands, except per share amounts)

                                                     2010                  2009                       % Change

Net revenue                      $     234,083          $ 131,144                     78    %

GAAP (Generally Accepted Accounting Principles)

Gross Margin                              47.9 %          36.1 %

Operating Margin                      24.2 %            2.2 %

Net Income                               $44,630         $4,015                         1,012 %

Earnings per diluted share       € 0.41           $ 0.05                           720   %

Cree’s recent developments include the LED XLamp, which delivers 160 lumens per watt at 350mA, the CR6(TM) and a new 6-inch LED downlight designed for the residential market. Cree’s R &D department has also achieved 208 lumens per watt from a white high-power LED.
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