Cree beats by $0.07, reports revs in-line; guides Q3 EPS (midpoint of range below consensus), guides Q3 revs in-line with consensus
Reports Q2 (Dec) earnings of $0.46 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus Estimate of $0.39; revenues rose 19.9% year/year to $415.1 mln vs the $412.54 mln consensus.
Co issues guidance for Q3, sees EPS of $0.34-0.41, excluding non-recurring items, vs. $0.41 Capital IQ Consensus Estimate; sees Q3 revs of $390-420 mln vs. $412.93 mln Capital IQ Consensus Estimate. Q3 Guidance Details: For its third quarter of fiscal 2014 ending March 30, 2014, Cree targets GAAP gross margin targeted to be 37.7%+/- and non-GAAP gross margin targeted to be 38.5%+/-. Operating expenses are targeted to be similar to Q2. The tax rate is targeted at 21.0%+/- for the third quarter of fiscal 2014.
Gross margin decreased 110 basis points from Q1 of fiscal 2014 to 37.5% on a GAAP basis and decreased 100 basis points to 38.2% on a non-GAAP basis. Inventory increased $17.1 million from Q1 of fiscal 2014 to $234.5 million, with days of inventory of 81 days.
"Fiscal Q2 was another strong quarter as revenue increased to a record $415 million driven by strong growth in LED fixtures and LED bulbs. For the first half of fiscal 2014, revenue is up 22% from the first half of fiscal 2013 and Non-GAAP operating profit is up 38%...Our strategy is working, the business is growing and we've made great initial progress building the Cree brand."