NEW YORK ( TheStreet) -- Is it ever possible for a stock in the LED space to have a non-eventful earnings day? That hasn't been the case for shares of LED bellwether Cree ( CREE), yet some Cree watchers are saying that when Cree reports on Tuesday after the close crickets might be heard.

Cree already put the bad news out there when it pre-reported a revenue miss on March 23, and its shares are down 15% since then. Even though Cree has bounced off a series of 52-week lows which culminated in a share price of $40.25 last week, the bounce has been more like a falling forward for Cree shares, with the LED stock at $41.07 on Monday.

In March, Cree warned revenue would be in a range of $215 million to $220 million, a significant shortfall.

Chuck Swoboda, Cree's CEO and chairman, said at the time of the earnings guidance revision, "Despite the challenges we faced in Q3, distributor sell-through has improved and we target solid growth next quarter. Based on our preliminary outlook for Q4, we are currently targeting revenue to increase 10 to 12% in fiscal Q4 led by growth in LED components."

Given the bad news from Cree -- the third quarter in a row during which the company has failed to meet guidance -- it might seem logical to call a bottom in Cree shares, but doing so might not be taking into account the extent to which shorts hover around Cree shares, and the margin for error left in Cree's own gross margin guidance. Furthermore, long-time bears on Cree are sticking with the structural argument against the company and shrugging off the potential for earnings volatility, because of their belief that it gets worse for Cree, even if it gets marginally better for one quarter.

Hans Mosesman, Raymond James analyst and a long-time bear on shares of the LED company, said in an email to TheStreet, "An in-line quarter and outlook from Cree and the stock probably does nothing. An in-line top line with declining gross margins is a bad omen given that they've already guided the June revenue up 10% to 12%. As always, this stock is rather difficult to predict in terms of next-day direction, hence why we tend not to engage in the post earnings guess-work given our view of a structural problem for Cree going forward."

Cree said in its March guidance update that gross margin for the quarter would be 43%, but it's whether Cree guides higher or lower than 43% for the June quarter that could decide the short-term fate of Cree shares for those who do engage in the post-earnings guess work.

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