[Text|High-tech LED reporter Luo Shenghua] In the context of increased competition in the global lighting market and continued sluggish gross profit margin, CREE's performance continues to be under pressure.
CREE recently disclosed its third-quarter financial report for the fiscal year 2015. As of March 29, 2015, the company's third-quarter revenue for the fiscal year 2015 was $409.5 million, an increase of 1% from the $405.3 million in the third quarter of fiscal 2014. Compared with the slow growth of revenue, CREE showed a negative growth in net income.
According to US GAAP, CREE's third quarter net income was $0.7 million, a 98% decrease from the US GAAP net income of $28.2 million in the third quarter of fiscal 2014.
On a non-GAAP basis, net income for the third quarter of fiscal 2015 was $25 million, a 48% decrease from the non-GAAP net income of $47.7 million in the third quarter of fiscal 2014. This is the third quarter of CREE's FY2015 results continued to fall.
CREE financial indicators for the third quarter of fiscal 2015:
For reasons of the decline in net profit in the third quarter, CREE Chairman and CEO Chuck Swoboda said, “Despite the extreme winter weather this quarter, our fiscal third quarter revenue and non-GAAP operating profit Still within our target range." The reporter noted that Chuck Swoboda and CREE leaders also indicated that they were within the target range when the net profit fell in the first quarter.
Mr. Nie, who is familiar with the US LED market, said in an interview: Although CREE has the title of “price butcher†in the United States, it still cannot compare with the old companies such as GE and Philips in channel construction and brand influence, especially the involvement. With the development of silicon dioxide technology, its inherent silicon carbide technology advantages have gradually lost.
The inherent advantages of the gradual loss of <br> <br> according to Nie say, since 2015, although the LED output value in moving forward, but the LED business gross margin dropped significantly year on year in the economic efficiency of enterprises fell significantly, the production of business forms Still quite serious.
The slowdown in CREE's performance did not surprise Li Xuhui, the general manager of Keruida Optoelectronics. As a bridge between European and American designers and domestic companies, Li Xuhui's evaluation of the current CREE is that the price of silica drags down the price of silicon carbide. "The advantage of CREE is silicon carbide technology, but now the technology of sapphire has been upgraded, at the price of the product. CREE will become more and more uncomfortable if the gap is obvious and there is no technically absolute advantage.
As a global packaging giant, CREE's business mainly includes LED lamp beads, chips, silicon carbide materials and finished products applications. In general, the substrate mainly includes a silicon carbide substrate, a sapphire substrate, and a silicon substrate. CREE has always occupied a monopoly position in the field of silicon carbide technology, and has absolute control over the technology and price of products.
Silicon carbide technology is widely used in high power fields due to its stability. However, with advances in substrate technology, the limitations of the size of sapphire substrates have been broken, and six- and eight-size sapphire substrates have begun to appear. CREE's dominant position in high power has been threatened.
At the same time, in the past two years, with the changes in market demand, the LED lighting trend has gradually shifted from high power to medium power, which makes the CREE revenue and profit of the main high-power lighting continue to face pressure. Earlier in early October 2014, CREE issued a performance warning that caused the company's share price to plummet to a new low of more than a year and a half.
"Some outdoor lighting products that required light efficiency have often specified lamp beads that require CREE, but this situation is rare now." Li Xuhui said.
In the face of the expansion of market competition, since 2014, CREE has begun to put down some of the high-performance silicon carbide products. On the other hand, it is hoped that the corresponding competitors will be investigated for unfair transactions through litigation applications. However, the actual situation is that its various measures appear quite pale and weak.
Recently, its important competitor Taiwan Dongbei released its first quarter 2015 report, benefiting from strong orders from LED lighting customers. Dongbei accumulated revenue of 2.34 billion yuan in the first quarter, up 22% from the same period of last year, including March camp. The company received 8.6 billion yuan, a 39% increase from February, and its performance continued to climb.
“In the past, in order to consolidate the market share of its products, international big companies have been able to win litigation against Taiwanese companies. However, with the development of local enterprises’ own technologies, the number of orders for lighting products has continued to increase substantially. Interfered with overseas litigation." Dongbei explained.
Despite hopes lighting business <br> <br> packages gradually retreated, but Chuck Swoboda is still the company's future development remain optimistic, "We are confident that we remain on the right track of development, and for the future of lighting Growth and power and RF upside are optimistic."
In the fourth quarter of fiscal 2015, CREE plans to achieve a revenue target of $420 million to $440 million and pin its main hopes in the lighting business.
As the competition in the LED market intensifies, the gross profit margin of LED companies is rapidly declining. According to US GAAP, the CREE gross margin in the third quarter fell by 250 basis points to 30.6% from the second quarter of fiscal 2015, reaching a record low.
In recent years, CREE, which started as a package, competes with traditional rivals such as Philips and GE, and hopes to open the advantage with price.
In response to the next step in market competition, CREE announced that it will launch the RUL series of outdoor street lighting products, designed to achieve price advantages, to accelerate the adoption of LED lighting in rural areas of North America. At the same time, the introduction of TW series T8 lamp replacement, continue to expand the product portfolio to meet consumer price needs.
"CREE has an advantage in the product price system, but it still has no way to compete with traditional lighting companies such as Philips and GE in terms of brand influence and after-sales service capabilities." Li Xuhui said.
Li Xuhui believes that the LED lighting industry is undergoing a reshuffle. In 2015, the overall gross profit margin of the industry will continue to decline. CREE as a multinational company, with its capital and scale advantages, although it has certain advantages, but wants to go to the end and maximize profits. It is also a long way to go.
CREE recently disclosed its third-quarter financial report for the fiscal year 2015. As of March 29, 2015, the company's third-quarter revenue for the fiscal year 2015 was $409.5 million, an increase of 1% from the $405.3 million in the third quarter of fiscal 2014. Compared with the slow growth of revenue, CREE showed a negative growth in net income.
According to US GAAP, CREE's third quarter net income was $0.7 million, a 98% decrease from the US GAAP net income of $28.2 million in the third quarter of fiscal 2014.
On a non-GAAP basis, net income for the third quarter of fiscal 2015 was $25 million, a 48% decrease from the non-GAAP net income of $47.7 million in the third quarter of fiscal 2014. This is the third quarter of CREE's FY2015 results continued to fall.
CREE financial indicators for the third quarter of fiscal 2015:
| the third quater | Variety | |||||||
| 2015 (unaudited) | 2014 (unaudited) | |||||||
| Net income | $409,519 | $405,259 | $4,260 | 1% | ||||
| US General Accounting Standards (GAAP) | ||||||||
| gross profit | 30.6% | 37.0% | ||||||
| Operating profit margin | 0.4% | 7.5% | ||||||
| Net income | $651 | $28,164 | $ (27,513) | (98)% | ||||
| Diluted earnings per share | $0.01 | $0.23 | $ (0.22) | (96)% | ||||
| Non-GAAP | ||||||||
| gross profit | 31.4% | 37.8% | ||||||
| Operating profit margin | 6.4% | 13.2% | ||||||
| Net income | $24,965 | $47,710 | $(22,745) | (48)% | ||||
| Diluted earnings per share | $0.22 | $0.39 | $(0.17) | (44)% | ||||
For reasons of the decline in net profit in the third quarter, CREE Chairman and CEO Chuck Swoboda said, “Despite the extreme winter weather this quarter, our fiscal third quarter revenue and non-GAAP operating profit Still within our target range." The reporter noted that Chuck Swoboda and CREE leaders also indicated that they were within the target range when the net profit fell in the first quarter.
Mr. Nie, who is familiar with the US LED market, said in an interview: Although CREE has the title of “price butcher†in the United States, it still cannot compare with the old companies such as GE and Philips in channel construction and brand influence, especially the involvement. With the development of silicon dioxide technology, its inherent silicon carbide technology advantages have gradually lost.
The inherent advantages of the gradual loss of <br> <br> according to Nie say, since 2015, although the LED output value in moving forward, but the LED business gross margin dropped significantly year on year in the economic efficiency of enterprises fell significantly, the production of business forms Still quite serious.
The slowdown in CREE's performance did not surprise Li Xuhui, the general manager of Keruida Optoelectronics. As a bridge between European and American designers and domestic companies, Li Xuhui's evaluation of the current CREE is that the price of silica drags down the price of silicon carbide. "The advantage of CREE is silicon carbide technology, but now the technology of sapphire has been upgraded, at the price of the product. CREE will become more and more uncomfortable if the gap is obvious and there is no technically absolute advantage.
As a global packaging giant, CREE's business mainly includes LED lamp beads, chips, silicon carbide materials and finished products applications. In general, the substrate mainly includes a silicon carbide substrate, a sapphire substrate, and a silicon substrate. CREE has always occupied a monopoly position in the field of silicon carbide technology, and has absolute control over the technology and price of products.
Silicon carbide technology is widely used in high power fields due to its stability. However, with advances in substrate technology, the limitations of the size of sapphire substrates have been broken, and six- and eight-size sapphire substrates have begun to appear. CREE's dominant position in high power has been threatened.
At the same time, in the past two years, with the changes in market demand, the LED lighting trend has gradually shifted from high power to medium power, which makes the CREE revenue and profit of the main high-power lighting continue to face pressure. Earlier in early October 2014, CREE issued a performance warning that caused the company's share price to plummet to a new low of more than a year and a half.
"Some outdoor lighting products that required light efficiency have often specified lamp beads that require CREE, but this situation is rare now." Li Xuhui said.
In the face of the expansion of market competition, since 2014, CREE has begun to put down some of the high-performance silicon carbide products. On the other hand, it is hoped that the corresponding competitors will be investigated for unfair transactions through litigation applications. However, the actual situation is that its various measures appear quite pale and weak.
Recently, its important competitor Taiwan Dongbei released its first quarter 2015 report, benefiting from strong orders from LED lighting customers. Dongbei accumulated revenue of 2.34 billion yuan in the first quarter, up 22% from the same period of last year, including March camp. The company received 8.6 billion yuan, a 39% increase from February, and its performance continued to climb.
“In the past, in order to consolidate the market share of its products, international big companies have been able to win litigation against Taiwanese companies. However, with the development of local enterprises’ own technologies, the number of orders for lighting products has continued to increase substantially. Interfered with overseas litigation." Dongbei explained.
Despite hopes lighting business <br> <br> packages gradually retreated, but Chuck Swoboda is still the company's future development remain optimistic, "We are confident that we remain on the right track of development, and for the future of lighting Growth and power and RF upside are optimistic."
In the fourth quarter of fiscal 2015, CREE plans to achieve a revenue target of $420 million to $440 million and pin its main hopes in the lighting business.
As the competition in the LED market intensifies, the gross profit margin of LED companies is rapidly declining. According to US GAAP, the CREE gross margin in the third quarter fell by 250 basis points to 30.6% from the second quarter of fiscal 2015, reaching a record low.
In recent years, CREE, which started as a package, competes with traditional rivals such as Philips and GE, and hopes to open the advantage with price.
In response to the next step in market competition, CREE announced that it will launch the RUL series of outdoor street lighting products, designed to achieve price advantages, to accelerate the adoption of LED lighting in rural areas of North America. At the same time, the introduction of TW series T8 lamp replacement, continue to expand the product portfolio to meet consumer price needs.
"CREE has an advantage in the product price system, but it still has no way to compete with traditional lighting companies such as Philips and GE in terms of brand influence and after-sales service capabilities." Li Xuhui said.
Li Xuhui believes that the LED lighting industry is undergoing a reshuffle. In 2015, the overall gross profit margin of the industry will continue to decline. CREE as a multinational company, with its capital and scale advantages, although it has certain advantages, but wants to go to the end and maximize profits. It is also a long way to go.
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