However, the company's net income for the June 2006 quarter was only $13.2 million, or $0.17 per share, a drop of 37% compared with $21 million or $0.27 per share for the same quarter of 2005.
The net income for the quarter includes stock compensation expenses of $2.3 million, or $0.03 per share, and a further $1.8 million, or $0.02 per share, of additional tax expense related to the company's investment in Color Kinetics and other end-of-year tax adjustments.
"Although the fourth quarter was more challenging than we expected, we remain optimistic that we can expand our business by leveraging our strengths in LED chip and SiC materials technology to broaden our product line with higher-value, component-level products for the emerging markets in LED lighting and power," Chuck Swoboda, Cree Chairman and CEO. "While this strategy may limit our operating results in the near term, we believe these investments are critical to put Cree in position to increase shareholder value over the next several years."
Cree's share price was hit hard in mid-July when the company pre-announced its poor financial results for the quarter (see Cree shares plummet after profit warning), blaming higher manufacturing costs associated with new products and other factors.
Cree's LED revenue was $84.5 million for the quarter, down 2% sequentially, but up slightly from the $83.6 million recorded in the same period last year. Significantly, Cree's LED shipments have grown by 33% compared with its June 2005 quarter, while LED average selling prices (ASPs) have fallen by 24%.
Cree's total LED revenue for its fiscal year from July 2005 to June 2006 was $342.1 million.
The company's total revenue for the 2006 fiscal year was $423 million, and net income was $76.7 million, or $0.98 per share, compared to $91.1 million or $1.18 per share for fiscal 2005.
For its first quarter of fiscal 2007, Cree currently targets revenue in a range of $102 million to $106 million with earnings of $0.14 to $0.17 per share, including the impact of $0.03 per share in our estimate for the cost of expensing stock compensation.
