Factors Setting The Tone For Cree (CREE) In Q4 Earnings
Zacks Investment Research | Aug 15, 2019 10:28PM ET
Cree, Inc. (NASDAQ:CREE) is scheduled to report fourth-quarter fiscal 2019 earnings results on Aug 20.
Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average positive earnings surprise of 45.28%.
Q3 Results Sneak-Peak
Cree had reported non-GAAP earnings of 20 cents per share in the third quarter of fiscal 2019, improving 17.6% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate by 25%.
Revenues came in at $274.1 million, up 22% year over year. However, the figure lagged the Zacks Consensus Estimate of $275 million.
Guidance & Estimates for Q4
Cree was compelled to trim fiscal fourth-quarter outlook owing to addition of Huawei to the entity list. Markedly, in the fourth quarter of fiscal 2019, the company had anticipated revenues from products and materials in connection with Huawei’s wireless infrastructure to be up to $15 million, which remains a major concern.
Per the revised guidance, Cree anticipates fiscal fourth quarter revenues in the range of $245 million to $252 million. The Zacks Consensus Estimate is pegged at $248.34 million, suggesting a decline of 39.4% on a year-over-year basis.
Non-GAAP earnings have been forecast to be between 8 and 12 cents per share. The Zacks Consensus Estimate for earnings is pegged at 10 cents, indicating a decline of 9.1% from the year-ago quarter. Notably, the consensus has remained unchanged for the past 30 days.
Let’s see how things are shaping up prior to this announcement.
Factors Likely to Influence Q4 Results
Cree is expected to benefit from ongoing momentum in Wolfspeed business. The segment includes silicon carbide (or SiC) materials, power solutions and RF devices. Robust adoption of the company’s SiC, RF and Power solutions, primarily by automakers to accelerate deployment of electric vehicles (EVs) remains noteworthy.
During the quarter under review, Volkswagen (DE:VOWG_p) Group selected Cree as silicon carbide partner for Volkswagen’s FAST (or Future Automotive Supply Tracks) Initiative. The company’s expertise in SiC technology will be utilized by the automaker to efficiently implement global vehicle projects.
Expanding clientele is infusing confidence in the stock. Shares of Cree have returned 33.7% year to date, outperforming the Zacks Investment Research
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