|To: slacker711 who wrote (9935)||8/14/2019 9:50:51 AM|
They stated that 6% of revenues were for SiC so that amounts to $81.6m for FY2019 (up 51% YoY). They had $24m in SiC capex.
Also found this interesting.
And we think that that explains why we believe we have the largest share of the RF market at this point with the silicon carbon substrates.
I really would like Cree to start giving some granularity about Wolfspeed sales. Putting RF, power, substrates and devices all into one big bucket does investors a huge disservice.
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|From: slacker711||8/19/2019 2:38:12 PM|
|Hopefully, the weakness today indicates that expectations are low for tomorrow. 5G appears to be accelerating its roll-out but it is tough to say what impact the Huawei ban will have. I assume that Cree will still be able to sell wafers to Infineon/On for 5G RF products but they will lose out on the possibility of direct sales. |
Also, the auto sector has been very weak in China and that could have some impact on near-term demand for SiC power products but the timing of the future ramp of EV sales is the real question.
Regardless of the earnings tomorrow, the analyst meeting in September should be a key catalyst for the stock going forward.
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|From: slacker711||8/20/2019 4:05:26 PM|
|Cree Reports Financial Results for the Fourth Quarter and Fiscal Year 2019|
August 20, 2019
DURHAM, N.C. -- Cree, Inc. (Nasdaq: CREE) today announced revenue of $251.2 million for its fourth quarter of fiscal 2019, ended June 30, 2019. This represents a 5% decrease compared to revenue of $265.8 million reported for the fourth quarter of fiscal 2018, and an 8% decrease compared to the third quarter of fiscal 2019. GAAP net loss from continuing operations for the fourth quarter was $34.6 million, or $0.33 per diluted share, compared to GAAP net loss from continuing operations of $28.9 million, or $0.29 per diluted share, for the fourth quarter of fiscal 2018. On a non-GAAP basis, net income from continuing operations for the fourth quarter of fiscal 2019 was $11.5 million, or $0.11 per diluted share, compared to non-GAAP net income from continuing operations for the fourth quarter of fiscal 2018 of $14.5 million, or $0.14 per diluted share.
For fiscal year 2019, Cree reported revenue of $1.1 billion, which represents a 17% increase when compared to revenue of $0.9 billion for fiscal 2018. GAAP net loss from continuing operations was $57.9 million, or $0.56 per diluted share. This compares to a GAAP net loss from continuing operations of $16.4 million, or $0.17 per diluted share, for fiscal 2018. On a non-GAAP basis, net income from continuing operations for fiscal year 2019 was $76.9 million, or $0.74 per diluted share, compared to $36.9 million, or $0.37 per diluted share, for fiscal 2018.
“We are pleased with our performance in the quarter as non-GAAP earnings per share was within the top end of our updated range despite the challenging operating environment," stated Gregg Lowe, Cree CEO. "While the Huawei ban and softness in the LED market will continue to impact the sector in the short-term, our long-term outlook remains unchanged - there is a significant opportunity to help customers make the shift from silicon to silicon carbide solutions for their next generation applications.”
For its first quarter of fiscal 2020, Cree targets revenue from continuing operations in a range of $237 million to $243 million. GAAP net loss from continuing operations is targeted at $42 million to $46 million, or $0.39 to $0.43 per diluted share. Non-GAAP net loss from continuing operations is targeted to be in a range of $3 million to $7 million, or $0.03 to $0.07 per diluted share. Targeted non-GAAP loss from continuing operations excludes $39 million of estimated expenses, net of tax, related to stock-based compensation expense, the amortization or impairment of acquired intangibles, factory optimization restructuring and start-up costs, amortization of debt issuance costs and discount, and project and transaction costs. The GAAP and non-GAAP targets from continuing operations do not include any estimated change in the fair value of Cree’s Lextar investment.
Quarterly Conference Call:
Cree will host a conference call at 5:00 p.m. Eastern time today to review the highlights of the fourth quarter and fiscal year 2019 results and the fiscal first quarter 2020 business outlook, including significant factors and assumptions underlying the targets noted above.
The conference call will be available to the public through a live audio web broadcast via the Internet. For webcast details, visit Cree's website at investor.cree.com/events.cfm.
Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available on Cree's website at investor.cree.com/results.cfm.
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|To: slacker711 who wrote (10001)||8/22/2019 10:02:19 AM|
|Random thoughts on Cree's earnings.|
- The trade war is having an enormous impact on the business. LED revenue was down ~25% YoY and gross margins are now targeted to be only 17% in the December quarter. Cree has begun transitioning some of that capacity to Wolfspeed but it takes time to ramp the device capacity (less so for materials).
It sounds like they are expecting at least some of the impact of the Huawei ban to be alleviated as the supply chain shifts. I assume that Cree was selling some SiC devices to Huawei and will now likely supply SiC wafers to non-US device suppliers to Huawei.
A number I would have liked to hear was LDMOS RF sales to Huawei. Those are likely permanently lost.
- Maybe I missed it, but this is the first time I can remember management mentioning a long-term gross margin target for Wolfspeed in the low to mid-50's. I had thought that they were targeting low-50's. A fairly positive change if my memory is correct.
- I am not generally a fan of metrics like "opportunity pipeline". However, the growth in this number does grab your attention. Last October, Cree had talked about a $1 billion dollar pipeline in SiC power components. Last quarter, it was a total of $5 billion for RF and Power....and now they used $9 billion. Presumably are defining that as the total dollar amount available for new design wins over the lifetime of the project.
They gave a timeline of 12 months or so to start seeing those "opportunities" being translated into design wins. To fulfill their potential, we need to see Cree gain traction in tier-one vendors for SiC components. Winning a direct supply agreement with companies like Volkswagen or Tesla would be huge.
- Is the recent deal with On Semi their 2nd deal with them?
- Dilution was an insane 2% during the quarter and almost 5% for the year. This is just shareholder robbery.
On the positive side, there has been zero insider selling since last August.
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