News

21 April 2010

 

Record, above-target performance at Cree from buoyant lighting market

LED chip, lamp and lighting fixture maker Cree Inc of Durham, NC, USA is celebrating record revenue and net income for its fiscal third-quarter (Q3/2010) ended 28 March. Revenue of $234.1m represents a 78% increase over the $131.1m reported at the same time last year. The ‘generally accepted accounting principles’ (GAAP) net income of $44.6m was ten times better than the $4m recorded for fiscal Q3/2009.

“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,” says chairman & CEO Chuck Swoboda. The firm exceeded its revenue targets for the quarter on the back of strong LED growth, primarily of its XLamp products. In the last quarter, more than half the LED products were for ‘general lighting’.

In terms of margins, the company saw much improvement in execution. The backlog going into fiscal Q4 is larger than at the end of the last quarter, despite some movement from a 12-week lead-time to an 8-week target.

The revenues for LED production increased 78% year-on-year (Y/Y) to $211.8m, while power and RF products increased 83% to $22.27m. Some $3m of the power and RF revenue came from government contracts, while for LEDs only $0.5m came from this source.

The ‘very good’ execution in the quarter was due to good ramp-up of capacity, and profitability was enhanced due to the cost-leverage enabled by increased volume/scale of production and good yields. The company reports that capital expenditure was about $66m in support of recent capacity expansion.

Looking forward to fiscal Q4/2010 (ending 27 June), Cree expects revenue of $255–265m, with net income of $46–49m. These represent year-on-year increases of 72–79% in revenue and about a five-fold improvement in net income.

The company also gave a ‘preliminary estimate’ for next year’s capital expenditure of $250–300m.

In fiscal first-half 2011 (i.e. later this calendar year), Cree plans to begin LED chip/wafer and power device production on its first 150mm line, ramping up in fiscal 2012. In addition, a new back-end facility in China is due to begin work. Pilot production is also due to begin shortly in Cree’s new module and lighting solutions businesses.

Sector	Q3 (3/28/10)		Q2 (12/27/09)		Q1 (9/27/09)		Q4 (6/28/09)
	$K	Q/Q	$K	Q/Q	$K	Q/Q	$K	Q/Q
LED Products	211,814	16%	181,986	17%	156,027	14%	136,698	15%
Power & RF products	22,269	27%	17,489	33%	13,103	15%	11,412	-6%
Total revenue	234, 083	17%	199,475	18%	169,130	14%	148,110	13%
Net income (GAAP)	44,630	32%	33,786	61%	21,026	117%	9,695	141%

Table: Cree’s revenue and net income over past year (including contract business).

See related items:

Cree reports record revenue up 18% sequentially to $199.5m

Cree’s revenue grows 14% to record $169m

Cree grows 15% to record annual revenue of $567m

Cree’s revenue falls 11%, but 5-9% rebound expected this quarter

Search: Cree LEDs

Visit: www.cree.com

The author Mike Cooke is a freelance technology journalist who has worked in the semiconductor and advanced technology sectors since 1997.