Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: pompsander who wrote (6164)	6/11/2002 10:52:12 PM
From: Ron	Respond to of 10714

CREE revenue story from local paper: Cree expects higher sales The news, an unusual bit of good tidings for the sector, sends Cree's stock surging. By DAN EGBERT, Staff Writer DURHAM - Semiconductor manufacturer Cree said Monday that sales of its light-emitting diodes are rebounding after being hurt by the slowing economy and a slump in demand for cell phones. It's one of the first signs of good news at Cree, which has seen its stock fall 57 percent this year amid the overall technology slowdown. Cree had lowered its revenue forecasts twice this year before the announcement. The Durham-based company, which makes LED chips that light up cell-phone screens and automobile dashboards, said it expects sales for the quarter ending June 30 to increase 8 percent to 11 percent from the same period last year. The improvement from the company's previous guidance of 5 percent revenue growth would mean revenue of $36 million to $37 million for the quarter. "It's a pretty good day for us," said Cree President and Chief Executive Chuck Swoboda. "We saw an increase in revenue back in April, and it picked up more recently." Cree also maintained its guidance of 5 percent revenue growth for its fiscal year, which also ends this month. The company announced the news in advance of a presentation it will make today at an investor's conference in New York. The company's stock rose $1.67, or 15 percent, Monday to close at $12.67. It's still trading well below its 52-week high of $32.45 on Jan. 4. Prudential Securities analyst Hans Mosesmann upgraded his rating on Cree stock to "buy" from "hold" on the news. "We believe the pickup in core LED products" is a sign "that business has bottomed for Cree," he wrote in a research note. The revenue improvement is an unusual piece of good news in the semiconductor industry. Last week, chipmaker Intel cut its second-quarter sales forecast, causing its stock to fall 19 percent Friday and prompting a sell-off on Wall Street. Cree's increase reflects its ability to win more sales in the cell-phone market, even though global sales of the mobile devices are slowing globally, said Pierre Maccagno, an analyst with Needham & Co. in New York. "It's a sign that things may be beginning to turn around in this sector," Maccagno said. The company's blue-and-white, light-emitting diode chips are being used in the newer generation of cell phones, many of which have color screens. Cree also said Monday that it is taking a $17 million, non-operating charge this quarter because of a "significant and sustained" decline in the value of equity investments. Those investments are in other technology companies that Cree partners with, said Chief Financial Officer Cynthia Merrell. Because it's only a one-time charge, the move is basically a "non-issue" for the company's stock, Prudential analyst Mosesmann said. The company is on target to meet average analysts' earnings estimates of 1 cent per share prior to this charge and will report a net loss for the quarter, Swoboda said. Cree is scheduled to report its quarterly results July 24.