CREE Cuts March-Quarter Financial Guidance Due to COVID-19

Cree has announced preliminary results for its third quarter of fiscal 2020 ended March 29, 2020, and has provided a business update in light of the COVID-19 pandemic, which has had a greater impact than originally anticipated when the Company provided the third-quarter outlook on January 29, 2020.

Revenue for the third quarter of fiscal 2020 is expected to be approximately $216 million, compared to $274 million in the third quarter of fiscal 2019 and $240 million in the second quarter of fiscal 2020. The Company expects GAAP net loss for the third quarter of fiscal 2020 to be $63 million to $65 million, or $0.58 to $0.60 per diluted share. On a non-GAAP basis, the net loss is expected to be in a range of $15 million to $17 million, or $0.14 to $0.16 per diluted share. These preliminary financial results are subject to completion of the Company’s customary quarterly closing and review procedures.

Cree CEO Gregg Lowe stated that the health and well-being of their employees, customers, and partners remain their top priority during this unprecedented time. They are closely monitoring the rapidly evolving COVID-19 situation, as well as guidelines from federal, state and local officials. Their manufacturing facilities in the U.S. are operating as essential businesses in states that have issued “shelter-in-place” orders and have instituted strict measures that balance employee safety with meeting the needs of the customers. These measures include increasing the number of employee sick days, robust screening, social distancing and cleaning protocols to ensure the safety of their employees and the protection of the customers, suppliers, and partners.

The Company will provide a more detailed review of its business when it reports its third-quarter fiscal 2020 results on April 29, 2020.

Lowe continued that their strong balance sheet allows them to navigate the current environment while maintaining capital expenditure plans, including the construction of their new facilities in New York and North Carolina, to support future growth. In addition, in light of the current operating environment, they'll continue to be diligent in the management of their liquidity position to meet the needs of the business. While near-term market conditions are fluid, they believe the long-term opportunities for silicon carbide remain significant and are committed to expanding their capacity to meet the anticipated long-term demand.

Q3 FY2020
Three months ended March 29, 2020
Preliminary Results
(as of April 2, 2020)
Prior Outlook Guidance
(as of January 29, 2020)
Revenue $216M
$221M to $229M
Wolfspeed revenue
$116M to $120M
LED revenue
$105M to $109M
Non-GAAP net loss
$15M to $17M
$10M to $16M
Non-GAAP loss per diluted share
$0.14 to $0.16
$0.09 to $0.15