NEW YORK ( TheStreet) -- Cree ( CREE) shares plunged almost 20% yesterday, a loss of more than $1.3 billion, and you would think the company was going out of business. It's not. The Durham, N.C. maker of LED lighting products actually did quite well. Sales rose to $375 million from $349 million the previous quarter and $307 million in the year-ago quarter. Net income nearly tripled from the same quarter a year ago, to $28.24 million. Margins improved. There's more than $1 billion of cash in the bank. There's no debt. What panicked the street was the company's guidance, which fell below analysts' estimates. CEO Chuck Swoboda lowballed it. There's also the fact that the company has been on a wild ride lately. Despite the drop, the company's stock price has more than doubled in the last year. From its October lows to its high of a few days ago, the price had tripled. This created what one technical trader called a "high pole warning," a sign of trouble ahead for the shares. Our Jim Cramer thought Cree had a "great quarter", and in many ways he was right. CEO Swoboda, 46, has been with Cree and its predecessor companies for 20 years, and he has been CEO since 2001. Swoboda is not a Wall Street guy, he's a company guy. He's a production guy, an engineering guy, not a hotshot money guy, not a slick sales guy. He is, in short, my kind of guy, and just the right guy to be running a company like this. The revolution inherent in Cree's lighting business is just getting started. Since LED lights, unlike incandescent bulbs or fluorescent tubes, are based on computing technology, they use a lot less energy, notes the Department of Energy, and they can be controlled by computers as well. Over the next 15 years, the Department of Energy predicts, the switch to LED lighting will save 348 TerraWatt Hours of electricity, enough to retire 44 major power plants of 1,000 megawatts each. Cree is just now moving strongly into street lights and flood lights.
For a warehouse, store or factory, this means light switches can go away, replaced by sensor networks that detect when and where light is needed, and respond accordingly. For consumers, it means you may never need to change a light bulb again, once LEDs fill your home. Because LEDs are small and directional, the quality of the light is a little different than incandescent and fluorescent bulbs. I have an LED over my desk and it casts sharper, more concentrated shadows than the fluorescent bulb in the ceiling light behind me.But the battery-operated LED in my closet may never need replacing -- the same with my LED Christmas lights. Cree is not the only player here. General Electric ( GE) is a big player in LEDs. Philips ( PHG) is another big player. Siemens ( SI) was a big player, but it recently spun off its LED lighting unit as Osram Licht (OSR:ETR), and that stock is up 27% since it debuted last month. There's another, related niche here: software for controlling LED systems. There are many start-ups here, and the major players are also involved. As the market matures expect buyouts. Overall, what you have in Cree is a stock that got a little ahead of itself, with a conservative management that doesn't want to promise what it can't deliver. And it's delivering plenty. After its plunge, the shares still trade with a price-to-earnings ratio of 78, which may be rich enough for traders to keep selling for a while. But this is not a broken company. Just the opposite. If stock traders keep panicking over higher interest rates, a company with organic growth, rising profits and no debt may eventually become a bargain. At the time of publication, the author owned shares of GE. Follow @DanaBlankenhor This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.