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Technology Stocks : Wolf speed -- Ignore unavailable to you. Want to Upgrade?

To: Dalin who wrote (4048)	10/13/2000 3:20:49 PM
From: Sully-	Read Replies (1) \| Respond to of 10713

From the Fool Friday October 13, 2:44 pm Eastern Time MotleyFool.com - Fool News Cree Beats Street By Rex Moore (TMF Orangeblood) The tone was definitely upbeat in Durham, N.C. yesterday as Cree (Nasdaq: CREE - news) reported yet another strong quarter. In fact, Chairman and CEO Neil Hunter called it the "finest performance in the history of the company." Revenues increased 80% compared to the year-ago period, and the earnings of $0.34 a share, two cents ahead of consensus estimates, represent a 143% year-over-year increase. Shareholders (this writer included) were happy to see margins holding firm and accounts receivable growing more slowly than revenues. However, inventory is growing faster than revenues and bears keeping an eye on. Management says that despite a backlog of orders, it has built up some inventory for "spot" orders, which have a higher average selling price. The stock is down some 10% today, possibly because of a mention on CNBC's Squawk Box that the company had "warned" of reduced margins in the future. That prompted a press release from Cree stating, "The company has issued no such 'warning." Gross margins are expected to be in the low- to mid-50s percent range in the intermediate term. Cree makes most of its money these days from the production and sale of light-emitting diodes (LEDs) -- think automotive dashboard and wireless handset backlighting. This market is experiencing explosive growth thanks to a combination of brighter LEDs and lower costs. Hunter says his team is on target to meet all its LED production goals. New product lines such as RF power devices and blue laser diodes for optical storage applications, meanwhile, are progressing as expected. The biggest news of the conference call was mentioned almost in passing. Hunter announced Cree had landed the services of Shuji Nakamura, who has attained legendary status in the optoelectronics field. Nakamura's brilliant research eventually generated hundreds of millions in sales for a small Japanese company, Nichia Corp. Nakamura will join Cree in a research capacity. Of his many accomplishments, one of Nakamura's biggest was the development of the blue-violet semiconductor laser. Red lasers are currently used to read the information stored on CDs and DVDs, but because a blue laser has a shorter wavelength, much more information can be packed on these discs once the product becomes commercially viable. Nakamura gave his company a head start on the blue laser, and then surprised the industry by leaving Nichia to accept a faculty position at the University of California at Santa Barbara. Once news of his departure spread, Nakamura was offered high-paying jobs by several U.S. companies. Because Nichia held patents on all his work, however, he feared his former company could sue him if he continued to build on his ideas while working for a competitor. So, he landed in the world of academics. Exactly what Cree offered Nakamura to pull him back into the commercial world isn't clear. In the conference call, Hunter went out of his way to explain to one questioner that Nakamura's work with Cree would be done without violating any Nichia patents or non-disclosure agreements. Even with those restrictions, Nakamura's work could help Cree lead the way in an industry where great research can pay huge dividends. For more things Foolish, go to the The Motley Fool's complete site! We aim to inform, educate and help you make good money, Fool. Also, check out the FoolMart, the place to shop for Foolish investing tools. Become a Fool for Motley Fool stock features, updates, contests, and product discounts! biz.yahoo.com Ö¿Ö