The 10-second takeaway
For the quarter ended March 31 (Q3), Cree beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share increased significantly.
Margins increased across the board.
Cree logged revenue of $348.9 million. The 25 analysts polled by S&P Capital IQ anticipated revenue of $343.6 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $284.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.34. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.34 per share. Non-GAAP EPS of $0.34 for Q3 were 70% higher than the prior-year quarter's $0.20 per share. GAAP EPS of $0.19 for Q3 were 138% higher than the prior-year quarter's $0.08 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 38.1%, 320 basis points better than the prior-year quarter. Operating margin was 6.9%, 490 basis points better than the prior-year quarter. Net margin was 6.3%, 300 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $368.4 million. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $1.37 billion. The average EPS estimate is $1.28.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,092 members out of 1,182 rating the stock outperform, and 90 members rating it underperform. Among 219 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 201 give Cree a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cree is outperform, with an average price target of $48.14.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.