NEW YORK ( TheStreet) -- In Wednesday's tech stock recap, TheStreet brings you the latest on Cree ( CREE), Advanced Micro Devices ( AMD), EMC Corporation ( EMC), Broadcom Corporation ( BRCM) and Motorola Solutions ( MSI).
LED manufacturer Cree, Inc. plummeted 16.9% during Wednesday trading after reporting first-quarter profits a day earlier.
The Durham, North Carolina-based company recorded first-quarter earnings of 39 cents on $391 million in revenue, compared to 27 cents on $315.8 million a year earlier. Net income totaled $47.3 million, a 49% year-on-year increase.
"The strong performance was primarily due to increased sales of our lighting products, higher gross margins and improved operating leverage across the business," said CEO Chuck Swoboda in a statement.
However, investors remained concerned on a lower-than-expected second-quarter guidance of between 36 and 41 cents a share and low gross margins on its moneymaker division, lighting.
Financial services company D.A. Davidson has maintained its "neutral" rating and $65 price target, citing concerns on the "company's ability to grow margins".
"We point out that gross margins within the company's Lighting Products segment (27%) are significantly lower than gross margins within both the LED Products (47%) and Power & RF (54%) segments," analyst Avinash Kant said in a research report. "As the Lighting Products division has been the fastest-growing segment for Cree (both sequentially and on a year-over-year basis), we believe margin expansion prospects remain challenging despite expectations of strong revenue growth."
TheStreet Ratings team rates Cree Inc as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: