Reuters: Cree "Cautiously Optimistic" on Demand Growth, Could Tap Debt Market

News Source: 
Reuters

Cree Inc is "cautiously optimistic" that demand for its products will pick up in the coming months, and it could tap the debt markets to help fund its growth, said Cree’s CEO Chuck Swoboda in an interview with Reuters on Tuesday.

With no outstanding debt and more than $400 million in cash, Cree is not currently planning a debt issuance, but it would be better to issue debt before the company was in need of cash, said Swoboda.

Though demand from automobile, cell phone and other consumer applications sink with the weak economy, Swoboda said "The initial signals are positive". The company is expecting some growth in the current quarter, for the U.S. stimulus packaged passed earlier this year is helping cities and municipalities fund new LED projects, Swoboda told Reuters.

LEDs are more expensive than conventional lights but consume far less energy and can last for two decades or more. Those energy savings allow companies or cities to recoup their investment in the LEDs in as little as two to three years, Swoboda said.

The company has last month posted fiscal third-quarter profit of $4.0 million, or 5 cents per share. Shares in Cree have gained nearly 70 percent so far this year.

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