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TheStreet Open House

Why Cree Inc. Jumped in Extended Trading

NEW YORK (TheStreet) -- Cree Inc. (CREE) is jumping in extended trading on Tuesday after posting better-than-expected second-quarter earnings. Shares climbed 2.3% to $64.25, adding to 0.53% in gains achieved over Tuesday's session.

The LED-light maker reported net income for the December-ended quarter of 46 cents a share. Analysts surveyed by Yahoo! Finance had expected earnings of 39 cents a share. Quarterly revenue saw a 20% year-over-year increase to a record $415 million, beating consensus by $2.5 million.

"Fiscal Q2 was another strong quarter as revenue increased to a record $415 million driven by strong growth in LED fixtures and LED bulbs. For the first half of fiscal 2014, revenue is up 22% from the first half of fiscal 2013 and non-GAAP operating profit is up 38%," said CEO Chuck Swoboda in a statement.

For the third quarter ending March, management expects revenue in the range of $390 million to $420 million. Net income is expected between 34 cents a share to 41 cents a share.

TheStreet Ratings team rates CREE INC as a Buy with a ratings score of B-. The team has this to say about their recommendation:

"We rate CREE INC (CREE) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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