Cree (NASDAQ:CREE) will release its quarterly report on Tuesday, and with the stock near all-time highs, investors are enthusiastic that it will continue to show strong signs of growth. But even if Cree earnings turn out well this quarter, the longer-term question facing the LED-maker is whether competition from Universal Display (NASDAQ:OLED) and its organic-LED products will eventually hurt Cree's future prospects.

Cree has benefited greatly from the ever-increasing emphasis on energy efficiency in lighting, as consumers around the world move away from traditional incandescent light bulbs toward more efficient types of lighting. As LED products become less expensive, Cree has the potential to cash in on even faster growth from energy-conscious customers. But Universal Display and other competitors have seen the potential in the lighting market and are moving aggressively with their own initiatives. Can Cree hold them off? Let's take an early look at what's been happening with Cree over the past quarter and what we're likely to see in its report.

Stats on Cree

Analyst EPS Estimate

$0.39

Change From Year-Ago EPS

44%

Revenue Estimate

$392.31 million

Change From Year-Ago Revenue

24%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

How will Cree earnings fare this quarter?
Analysts in recent months have pulled back on their views for Cree earnings, reducing their September-quarter estimates by almost 10% and shaving almost a dime per share from full-year fiscal 2014 projections. The stock has been volatile but has risen 9% since mid-July.

Most of the pessimism surrounding Cree came from its most recent quarterly report in August. Even though Cree almost doubled its net income for the fiscal year and saw a 22% jump in year-over-year sales for the quarter, it gave poor guidance for the September quarter. The stock took a dive of more than 20% in a single day after the report.

But Cree managed to recover all those losses and more earlier this month, as an analyst's report pointed to the company's lower-cost LED bulb as a potential driver of higher-margin profits for the future. Strong earnings from LED rival Acuity Brands (NYSE:AYI) also helped drive Cree and the entire sector higher.

Still, Cree faces some major concerns. The first is that light bulbs are essentially a commodity, and so as Acuity, Philips Electronics, and other competitors see the potential from LED lighting, they'll inevitably pressure margins with products of their own. The second, though, is that Universal Display's organic LED specialty could become a bigger player in the lighting industry, offering a different technology that would potentially require a different response from Cree in order to keep a competitive edge. So far, Universal Display has stayed focused on applications like smartphones and non-commodity offerings, giving Cree some breathing room at least for now.

In the Cree earnings report, watch to see whether the company is able to dispel growth concerns from its previous quarter's results once and for all. As long as it keeps getting more consumers to use its products, Cree should be able to hold off Universal Display and keep growing.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on TwitterL @DanCaplinger. The Motley Fool recommends and owns shares of Universal Display. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.