Cree cuts June-quarter revenue guidance from $263-271m to $245-252m

Cree Inc of Durham, NC, USA says that – in response to (1) softer-than-expected demand for LED Products (as global trade uncertainties persist) and (2) the US Department of Commerce’s Bureau of Industry and Security (BIS) on 15 May adding Huawei Technologies Co Ltd and 68 of its affiliates to its ‘Entity List’ prohibiting the sale to Huawei of products covered by the Export Administration Regulations (EAR) without obtaining an appropriate export license – it has updated its financial guidance (provided on 1 May) for fiscal fourth-quarter 2019 (ending 30 June).

Revenue for products and materials associated with Huawei’s wireless infrastructure build-out were expected to be up to $15m in fiscal Q4/2019.

Pending any further guidance from BIS, Cree does not expect to ship any additional products in fiscal Q4 for the Huawei build-out and cannot predict when it will be able to resume such shipments.

For fiscal fourth-quarter 2019 for continuing operations, Cree has reduced its guidance for revenue from $263-271m to $245-252m (including $132-135m for its Wolfspeed silicon carbide materials, power and gallium nitride RF device business and $113-117m for its LED Products business) and for non-GAAP net income from $12-17m ($0.12-0.16 per diluted share) to $8-13m ($0.08-0.12 per diluted share).

Cree says that it will continue to monitor and provide updates for the impact of the BIS action on its business, including its ability to apply for and obtain licenses from BIS to allow it to ship products to Huawei going forward.

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Cree’s quarterly revenue grows 12% year-on-year, driven by Wolfspeed’s organic growth of over 50%

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