Cree Well Positioned to Meet Growing SiC Demand

May 05, 2019 by Scott McMahan

Cree, Inc. announced financial results for its Q3 of fiscal 2019, ended March 31, 2019. Revenue from continuing operations for the third quarter of fiscal 2019 was $274 million, a 22% increase compared to revenue from continuing operations of $225 million for Q3 of fiscal 2018.

The company posted GAAP net loss from continuing operations for the Q3 of fiscal 2019 was $22 million, or $0.22 per diluted share. This compares to a GAAP net loss from continuing operations of $10 million, or $0.10 per diluted share for the Q3 of fiscal 2018.

As previously announced, on March 14, 2019, Cree executed a definitive agreement to sell its Lighting Products business to IDEAL Industries, Inc. For this reason, the results of the Lighting Products business have been classified as discontinued operations in the consolidated statements of (loss) income for all periods presented.

Also, in the consolidated balance sheets, the related assets and liabilities associated with the discontinued operations are classified as held for sale.

The sale of the Lighting Business is expected to close by the end of Cree's fiscal year 2019, subject to customary closing conditions and governmental approvals. The parties received early termination of the waiting period under the Hart-Scott-Rodino Act in April 2019.

Revenues from Cree's Wolfspeed business increased 72% to $141 million from Q3 of 2018. The Wolfspeed revenue for Q3 of fiscal 2019 represents 51.5% of the company's total revenue.

"Our Wolfspeed business continued to post strong performance in the third quarter, which helped drive non-GAAP earnings per share above the top end of our range," said Cree CEO Gregg Lowe. "We are also very pleased to have recorded gross margin improvements across the business while addressing some softness within our LED business. We are well positioned to meet the growing demand for next-generation silicon carbide solutions over the next five years that support a variety of mega-trends including the auto industry's transition to electric vehicles and the rapid deployment of faster 5G wireless networks."

For its fourth quarter of fiscal 2019 ending June 30, 2019, Cree is targeting revenue from continuing operations in a range of $263 million to $271 million. GAAP net loss from continuing operations is targeted at $19 million to $24 million, or $0.18 to $0.23 per diluted share.

PCIM Announcement of SiC Capacity Expansion Planned

Cree CEO Greg Lowe intends to announce plans for Wolfspeed to increase its SiC capacity at PCIM Europe.