The stock has been perfectly volatile, but there has been nothing inconsistent about Cree's (NASDAQ:CREE) business performance. Cree is a semiconductor company that makes chips that power products such as light-emitting diodes (LEDs) and radio-frequency transistors.

The firm capped off its fiscal year by racking up another strong quarter of LED sales. In the fourth quarter, revenues grew 42% to $90.9 million, helping diluted earnings per share jump 84% to $0.28. That beat estimates by $0.05 per share. In addition, the company forecast better-than-expected first-quarter figures, saying that it expects to earn $0.26 to $0.28 per diluted share on revenues of $95 million to $97 million -- 85% of those sales have already been booked.

The stock, which had gained 12.4% yesterday ahead of the report, was up another 8.4% to $22.32 in midday trading.

The company attributed its 18% revenue growth from the previous quarter to "very strong LED chip demand" from its customers. On a unit basis, LED shipments jumped 19% sequentially and were up 59% from last year.

In addition, gross margins climbed to 52% in the fourth quarter from 50% in the third quarter as LED costs continued to fall. LED unit costs fell 5% sequentially and 19% year over year. Meanwhile, LED average selling prices fell only 2% sequentially and 7% from last year.

Just in the past seven months, the stock has seen the high teens, hit a high of $29 per share, and dropped back into the high teens over the past week before yesterday's rebound. But the business has been far less flaky, and the stock appears reasonably valued at 22 times trailing free cash flow.

For more on Cree, check out our take on the past few quarters:

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Fool contributor Jeff Hwang owns Cree shares.