-=Cree (CREE) reported earnings on Wed 29 Jan 20 (a/h)

Cree reports EPS in-line, beats on revs; guides Q3 EPS, revs below consensus

Reports Q2 (Dec) loss of $0.10 per share, in-line with the S&P Capital IQ Consensus of ($0.10); revenues fell 14.5% year/year to $239.9 mln vs the $236.33 mln S&P Capital IQ Consensus.

• GAAP and non-GAAP net losses from continuing operations attributable to controlling interest for the second quarter of fiscal 2020 include a $8.3 million reserve on inventory related to Huawei. As a result of the reserve on inventory related to Huawei, net losses per share from continuing operations attributable to controlling interest on a GAAP and non-GAAP basis increased by $0.08 and $0.05, respectively.

Co issues downside guidance for Q3, sees EPS of ($0.15)-($0.09), excluding non-recurring items, vs. ($0.08) S&P Capital IQ Consensus; sees Q3 revs of $221-229 mln vs. $237.80 mln S&P Capital IQ Consensus.

• These targets reflect the January 27, 2020 decision by the Chinese government to extend the Lunar New Year holiday due to the coronavirus outbreak. Targeted non-GAAP loss excludes $52 million of estimated expenses, net of tax, related to stock-based compensation expense, amortization or impairment of acquisition-related intangibles, factory optimization restructuring and start-up costs, accretion on convertible notes, and project, transformation and transaction costs. The GAAP and non-GAAP targets do not include any estimated change in the fair value of Cree's Lextar investment.