Cree Shares Plunge 18% On Outlook Cut

(RTTNews) - Shares of Cree Inc. (CREE) plunged a near 18 percent in extended hours on Tuesday after the lighting company lowered its financial outlook for the third quarter hurt largely by customer service disruptions and new product delays.

The Durham, North Carolina-based maker of lighting and semiconductor products now expects third-quarter revenues of about $367 million and adjusted earnings of $0.13 to $0.15 per share, down from prior outlook of $400 million to $430 million and earnings of $0.22 to $0.29 cents per share.

Analysts polled by Thomson Reuters currently expect earnings of $0.24 per share on revenues of $414.35 million for the quarter. Analysts' estimates typically exclude special items.

Cree blamed lower commercial orders at the Lighting Products unit due to customer service disruptions related to ERP system conversion and new product delays. Meanwhile, Cree expects LED Products and Power and RF Products divisions revenues to meet its expectations.

"The estimated revenue is below the Company's previously targeted range of $400 million to $430 million due to lower Lighting Products revenue," stated Chuck Swoboda, Cree Chairman and CEO. "I believe we've addressed the root causes that led to our recent business challenges. While it's premature to provide specific targets at this time, the order rate in commercial lighting improved in March, and we're optimistic that this, combined with demand for new products, will begin to drive growth in fiscal Q4."

CREE closed Tuesday's trading at $29.05, down $0.17 or 0.58%, on the Nasdaq. The stock further dropped $5.15 or 17.73% on the Nasdaq.