Cree results exceed targets
US LED lighting firm Cree has announced revenue of $436 million for its Q2 2016, ended December 27, 2015. This represents a 5 percent increase compared to revenue of $413 million reported for the Q2 2015, and a 2 percent increase compared to Q1 fiscal 2016.
GAAP net income for the Q22016 was $14 million, or $0.14 per diluted share, compared to GAAP net income of $12 million, or $0.10 per diluted share, for the Q22015. On a non-GAAP basis, net income for the Q2 2016 was $30 million, or $0.30 per diluted share, compared to non-GAAP net income for the Q2 2015 of $38 million, or $0.33 per diluted share.
"We delivered on our goal of building financial momentum in Q2, with earnings that exceeded our targets driven by solid revenue growth, good margins and operating expense leverage," stated Chuck Swoboda, Cree Chairman and CEO.
"Our lighting business continues to grow, the LED business has stabilised, and our Wolfspeed Power & RF division continues to make progress. Overall, we had a good first half of fiscal 2016 and are well positioned for a strong second half."
During the second quarter of fiscal 2016, Cree completed its LED business restructuring recognising $3 million of expense for factory capacity and overhead costs reductions. The restructuring charges are included in the GAAP results only.
Business Outlook
For its third quarter of fiscal 2016 ending March 27, 2016, Cree targets revenue in a range of $400 million to $430 million, with GAAP gross margin targeted to be 31.0 percent+/- and non-GAAP gross margin targeted to be 31.7 percent +/-.
GAAP gross margin targets include stock-based compensation expense of approximately $3 million, while non-GAAP targets do not. GAAP operating expenses are targeted to be approximately $119 million, and non-GAAP operating expenses are targeted to be approximately $100 million.
The tax rate is targeted at 20 percent +/- for the third quarter of fiscal 2016. GAAP net income is targeted at $4 million to $11 million, or $0.04 to $0.11 per diluted share, excluding any net changes associated with Cree's Lextar investment.
Non-GAAP net income is targeted in a range of $22 million to $29 million, or $0.22 to $0.29 per diluted share. The GAAP and non-GAAP per diluted share targets are based on an estimated 101 million diluted weighted average shares.
