In recent weeks, the company has seena strong surge in demand and is struggling to increase its caapcity in order to cope.
LED unit shipments were up 6% sequentially and 38% year-on-year. However, this was offset by a fall in average selling prices (ASPs) across all LED products of -5% sequentially, and -22% year-on-year.
LED production costs per unit were the same as the previous quarter, and down 5% on a year-on-year basis.
"We are particularly pleased with the success of our XLamp products, which grew nicely in the quarter, offsetting the seasonality in LED chip sales," said Chuck Swoboda, Cree Chairman and CEO.
Overall, Cree's revenue was $107.7 million with net income of $24 million, or $0.31 per diluted share. The company's share price dropped significantly based on its outlook for the current quarter, with Cree targeting revenue in the range of $106 million to $110 million, with earnings of $0.22 to $0.24 per share.
This target also includes a one-time charge of $0.01 per share related to the opening of Cree's new advanced device wafer fab in Research Triangle Park, North Carolina, which will be used for products such as SiC Schottky diodes.
"The fourth quarter will be a transition quarter for Cree as we start production of our high-power products in our new fab, which will add some additional operational expenses as well as one-time costs associated with the move," said Swoboda. "The combination of these investments and those we are making in R&D should put Cree in a strong position to grow our new products businesses."
Cree also will be increasing capacity for LEDs at its main campus in Durham. Over the past six weeks, demand has skyrocketed for Cree's products, catching the company unprepared, Swoboda said. "We're reacting a little now because from the demand standpoint, we weren't well-positioned for this increase we're seeing right now," he said. It will take most of the quarter to align the factory with demand, added Swoboda.
Philips reports growth for Lumileds
Earlier in the week, Philips reported revenues for its Lighting business of Euro 1.345 billion ($1.66 billion) for the first quarter of 2006.
The electronics giant said that sales at its Philips Lumileds Lighting business increased 25% in US dollar terms compared with Q1 2005.
Exact figures were not forthcoming. However, when Philips acquired full control of Lumileds by purchasing Agilent Technologies' share in the business, it was announced that in the 12 months from August 2004 to July 2005, Lumileds’ sales were US$ 324 million.
This would put Lumileds' revenue at around $80 million for Q1 2005, so the Q1 2006 figure is likely to be around $100 million.
A spokesperson for Lumileds said that demand had been driven by the camera-phone flash and automotive rear lighting markets, as well as by the company's core business of supplying high-power LEDs for a wide variety of lighting applications.