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Shares of Cree Jumped on Fiscal Results on January 20

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Nov. 20 2020, Updated 11:01 a.m. ET

Shares of Cree rose by 9% after fiscal 2Q16 results

Cree (CREE) reported its fiscal 2Q16 results last week and beat the analyst estimates. The company managed to reduce its operating expenses through the restructuring of its LED (light-emitting diode) business, and the commercial lighting and LED business posted strong growth, which was offset by a fall in power and RF (radio frequency) sales.

However, the company expects its weaker macroeconomic climate and weaker seasonal performance to affect its fiscal 3Q16 revenue. This is an industry-wide scenario, with semiconductor companies including Advanced Micro Devices (AMD), Intel Corporation (INTC), and Linear Technology Corporation (LLTC) reporting weaker guidance for the March 2016 quarter.

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Revenues and EPS for 2Q16

In fiscal 2Q16, Cree’s revenues rose 5% YoY (year-over-year) to $435.8 million, beating analyst estimates of $434.7 million. The company’s non-GAAP (generally accepted accounting principles) EPS (earnings per share) fell by 9% YoY to $0.30, topping the consensus estimate of $0.24. Cree reported better-than-expected EPS as the reinstatement of the research and development tax credit lowered its tax rate.

Cree’s revenues from business segments

Meanwhile, Cree’s revenues from its Lighting Products segment rose by 11% YoY to $255 million in fiscal 2Q16. Its revenue from the LED Product space rose by 1% YoY to $153.4 million, although revenues from its Power and RF Product segment fell by 12% YoY to $153.4 million.

After the company’s earnings release, Cree’s stock rallied by 9.7% to $26.6 on January 20, 2016, and increased by 14.2% in the trailing-five-day period. Notably, Intel constitutes 17.9% of the VanEck Vectors Semiconductor ETF (SMH).

In the next and final part of this series, we’ll look at a rumor that ran wild last week—and what it’s done so far for Xilinx.

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