Cree Pops on Big Quarter

It's up 14% in early trading after an analyst raises his price target.
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Updated from Jan. 15

Semiconductor maker

Cree

(CREE) - Get Report

was poised for a big day after the company said earnings rose 45% in its second quarter and an analyst raised his price target on the shares.

The shares were recently up $3.12, or 14%, to $24.24 the morning after Cree posted a 28% rise in second-quarter revenue and said third-quarter earnings and revenue would top existing estimates. ThinkEquity, a research shop, raised its price target on the shares to $30 Friday morning and maintained an overweight rating.

Durham, N.C.-based Cree earned $13.0 million, or 17 cents a share, on revenue of $72.7 million in the latest second quarter compared with earnings of $9.0 million, or 12 cents a share, on revenue of $56.7 million last year.

Analysts surveyed by Thomson First Call were forecasting earnings of 15 cents a share in the second quarter. For the current third quarter, Cree said it expects to earn 17 cents to 19 cents a share on revenue of $75 million to $76 million, compared with analysts' forecasts for earnings of 15 cents a share and revenue of $70.9 million.

The company said second-quarter gross margin rose to 47% from 43% in the first quarter, while net margin rose to 18% of revenue. Results were driven by strong sales in the light-emitting diode market, while margin improved on a favorable product mix, reduced pricing pressures and improved efficiencies.

The company said it generated $52.4 million of cash from operations in the quarter.