3 April 2020
Cree cuts March-quarter guidance due to greater-than-expected impact from COVID-19
Cree Inc of Durham, NC, USA has announced preliminary results for its fiscal third-quarter 2020 (ended 29 March 29) and provided a business update in light of the COVID-19 pandemic, which has had a greater impact than originally anticipated when the firm provided its outlook on 29 January.
Revenue for fiscal third-quarter 2020 is expected to be about $216m (rather than the $221-229m guidance), down 10% on $240m last quarter and 21% on $274m a year ago.
In particular, revenue for Cree’s Wolfspeed silicon carbide (SiC) materials, power and gallium nitride (GaN) RF device business is expected to be $114m, below the prior guidance of $116-120m, and down 5.6% on $120.7m last quarter and 19.3% on $141.3m a year ago.
LED Product revenue is expected to be $102m, below prior guidance of $105-109m, and down 14.4% on $119.2m last quarter and 23.2% on $132.8m a year ago.
On a non-GAAP basis, net loss is expected to be $15-17m ($0.14-0.16 per diluted share), at the high end of the prior guidance of $10-16m ($0.09-0.15 per diluted share) and worse than the $10.4m ($0.10 per diluted share) last quarter, and compared with net income of $20.4m ($0.20 per diluted share) a year ago.
“Our manufacturing facilities in the US are operating as essential businesses in states that have issued ‘shelter-in-place’ orders and we have instituted strict measures that balance employee safety with meeting the needs of our customers,” says CEO Gregg Lowe. “These measures include increasing the number of employee sick days, robust screening, social distancing and cleaning protocols to ensure the safety of our employees and the protection of our customers, suppliers, and partners,” he adds.
“Our strong balance sheet allows us to navigate the current environment while maintaining capital expenditure plans, including the construction of our new facilities in New York and North Carolina, to support future growth,” Lowe continues. “In addition, in light of the current operating environment, we’ll continue to be diligent in the management of our liquidity position to meet the needs of the business,” he adds. “While near-term market conditions are fluid, we believe the long-term opportunities for silicon carbide remain significant and we are committed to expanding our capacity to meet the anticipated long-term demand.”
Cree will provide a more detailed review of its business when it reports its fiscal third-quarter 2020 results on 29 April.