Cree, Inc. on Tuesday reported financial results for its third quarter of fiscal 2017, ended March 26, 2017, which missed Wall Street expectations. Shares of Cree declined over 7% in after-hours trade.
Revenue for the quarter was US$342 million, which represents a 7% decrease compared to revenue of $367 million for the third quarter of fiscal 2016 and a 15% decrease compared to the second quarter of fiscal 2017. GAAP net loss for the third quarter of fiscal 2017 was $99 million, or $1.02 per diluted share. This compares to GAAP net income of $152 thousand, or $0.00 per diluted share, for the third quarter of fiscal 2016.
Cree pointed out that the termination of the sale of Wolfspeed to Infineon Technologies AG (“Infineon”) means the Q3 results included two items that otherwise would not have occurred: an income tax expense charge of $86 million to establish a valuation allowance on its US deferred tax assets and other deferred charges, and an additional $12 million in expenses that was associated with Wolfspeed's long lived assets.
On a non-GAAP basis, net income for the third quarter of fiscal 2017 was $749 thousand, or $0.01 per diluted share, compared to non-GAAP net income for the third quarter of fiscal 2016 of $17 million, or $0.17 per diluted share. Excluding the two items mentioned above, which were not factored into the financial targets provided on January 24, 2017 based on the Company’s belief at that time that the Wolfspeed sale would be consummated, non-GAAP net income would have been $11 million, or $0.11 per diluted share, which is within the target range provided on January 24.
The non-GAAP results were within the company's target range, stated Cree Chairman and CEO Chuck Swoboda. “Our Wolfspeed and LED Products businesses performed at or above their targets for the quarter, while Lighting Products came in a little below plan due to softer market conditions and the lingering effects of the third party product driver issue that we mentioned in Q2. We believe the factors that impacted our lighting business are temporary and we target improvement in all three businesses in Q4."
For its fourth quarter of fiscal 2017 ending June 25, 2017, Cree targets revenue in a range of $340 million to $360 million. It expects non-GAAP per-share earnings to range from 2 cents to 7 cents.
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