Lazard Lowers Estimates On Cree

In a report published by Lazard Capital Markets, it is lowering estimates on Cree (NASDAQ: CREE).

Lazard said that it is lowering our F3Q estimates to $216.5M/$0.31 from $252M/$0.40 following Cree's preannouncement. “The Street expects $254M/$0.42. For F4Q, we now see $240.3M/$0.37 vs. $260M/$0.41. For FY12 we forecast $1.12B/$1.92 vs. $1.193B/$2.05 previously. Cree revised F3Q guidance of $215M-$220M in revenue, 43% GM and lower OpEx. Cree expects rev to increase 10-12% Q/Q in F4Q on increasing orders. GM will be hit in F4Q as utilization rates will be lower. ASPs are expected to be flat. While Cree has seen a few quarters of trouble, we believe the long-term growth drivers are intact. We believe that once the five-year plan in China is enacted at the regional levels, we should see a pickup in demand. Our checks show that Cree has won municipal projects in China, which are contributing to the company's F4Q outlook. We believe demand will get back on track over the next few quarters despite the near-term challenges.”

Cree closed yesterday at $49.00.