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News

19 October 2007

 

Cree’s rising expenses lead to operating loss

For its fiscal first-quarter 2008 (ended 23 September 2007), Cree Inc of Durham, NC, USA has reported revenue of $113.4m, up 2% on last quarter and 9% on $103.9m a year ago.

However, compared to a year ago, operating expenses have risen 35% from $26.4m to $35.7m (mainly through a 52% rise in sales, general and administrative expenses to $18.2m, plus $4m in amortization expense from prior-year acquisitions). Gross margin has fallen from 41% to 31% of revenue.

Compared to an operating income of $16.5m a year ago, Cree made an operating loss of almost $1m. However, a one-off gain of $14.1m from Cree’s stake in lighting system maker Color Kinetics Inc of Burlington, MA, USA (acquired in August by Philips) limited the drop in net income, from $13.3m to $12.7m.

“The LED business expanded both quarter-over-quarter and year-over-year, led by our XLamp LED product line, and we made good strides increasing our capacity for these products during the quarter,” says chairman and CEO Chuck Swoboda. In August, Cree announced plans to triple white XLamp LED manufacturing capacity by expanding production at its Cotco facility in China, as part of its strategy to accelerate the adoption of LED lighting in China and to build momentum for LED lighting worldwide.“We believe our strategy to increase sales by growing our LED component product lines while maintaining the current level of LED chip sales is on track,” Swoboda adds.

For its fiscal second-quarter 2008 (to end-December 2007), Cree is targeting revenue of $115-119m.

See related items:

Cree to triple white XLamp LED capacity

Royal Philips Electronics strengthens position in SSL market with Color Kinetics acquisition

Cree’s revenues and profits rebound

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