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For its fiscal third-quarter 2008 (ended 30 March), Cree Inc of Durham, NC, USA has reported revenue of $125m (including $0.7m from the acquisition of LED Lighting Fixtures Inc of Morrisville, NC, announced in February). This is up 5% on the prior quarter and up 38% on $90.3m a year ago.

LED revenues were $105m (up 7% on last quarter and up 57% on a year ago, following the acquisition of Hong Kong-based COTCO Luminant Device Ltd last April). Revenues for high-power (gallium nitride and silicon carbide) products were $6.2m (up 30% on last quarter and up 26% on last year). Revenue for materials (silicon carbide substrates) was $6.3m (down 11% on last quarter and 37% on a year ago).

“Cree’s strategy to drive revenue growth by focusing on LED lighting continued to pay dividends in Q3, as we delivered financial performance that was in line with our previously announced guidance,” says CEO Chuck Swoboda. “Revenue growth was led by higher sales of LED components, which exceeded sales of LED chips for the first time,” he adds.

Gross margin was 35% of revenue. Including net expenses of $6.4m, net income has fallen from $21.1m a year ago to $5.7m. However, excluding one-time items (such as a tax benefit in the year-ago quarter), net income has almost tripled from $4.7m to $12m ($0.14 per diluted share). Cash and investments grew $36.4m to $398.3m during the quarter.

The $103m acquisition of LED Lighting Fixtures Inc (the first company to develop a viable, energy-efficient, ‘no-compromise’ retrofit LED down-light for general illumination, it is claimed) expands Cree’s market opportunity by providing direct access to the lighting market, and enables it to drive retrofit solutions to convert existing lighting infrastructure to energy-efficient lighting and to accelerate the adoption of LED lighting, Swoboda believes. “For Q4, we target growth from XLamp LEDs, high-brightness LED components and our new LED lighting solutions, all of which are benefitting from the rising demand for energy-efficient LED lighting.”

Cree also announced that Austin, TX, USA and the Tianjin Economic Development Area (TEDA) in China are joining its LED City initiative. Austin plans to evaluate and deploy LED lighting technology across its municipal infrastructure and is offering rebates that cover about 30% of the upfront cost of LEDs to help businesses explore the benefits of the technology. TEDA is the first city area in China to join the program and has partnered with Tianjin Polytechnic University to develop the expertise necessary to accelerate the adoption of LED lighting in China.

Cree has also launched the LED University program, with inaugural participant North Carolina State University along with Marquette University, University of California at Santa Barbara, University of Arkansas and Tianjin Polytechnic University.

For its fiscal fourth-quarter 2008 (to 29 June), Cree expects revenue to rise 3-6% to $129-133m.

See related item:

Cree considers adding Asian chip fab in next few years

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