GELcore quarterly loss hides underlying growth

May 9, 2006
GELcore has hired staff to support its growth in 2006 which could see its revenue reach $100 million by year-end.
GELcore, the solid-state lighting joint venture between Emcore and GE Lighting, incurred a loss of $397,000 for the first quarter of 2006, according to Emcore's most recent financial results.

In the final quarter of 2005, GELcore reported a profit of $547,000. This swing of almost $1 million had a negative impact of $0.02 on Emcore's overall earnings per share for the quarter.

However, beneath this loss is an underlying growth trend which could see GELcore achieve revenues of $100 million in 2006.

Because GELcore is a private company owned by GE and Emcore, it is only obliged to reveal a limited amount of financial information about itself.

GELcore's revenue was estimated to be about $80 million for 2005, and strong growth is expected during 2006 now that GELcore has transferred its manufacturing from Canada to Mexico.

John Lau, managing director for semiconductor devices at Jefferies, an investment bank, told LEDs Magazine that GELcore's loss in the first quarter reflected the effect of hiring sales and marketing staff to support future growth.

"We believe GELcore is on a solid ramp to grow at a rate of 25% year-on-year," said Lau. "The company has hired significantly more staff to support this ramp, and as a result the [first quarter 2006] profitability has been impacted."

Most of GELcore's revenue comes from traffic lights, channel letters and other signage and display products. The industry is still waiting to see the high-power white LEDs unveiled at last year's Lightfair (see New white LEDs from GELcore offer range of CCT and CRI ).