Cree To Revamp LED Business, Cuts Q4 Sales Outlook; To Buyback $500 Mln. Stock

(RTTNews) - Cree Inc (CREE) on Wednesday announced a restructuring of its LED products business, citing a steeper-than-expected drop in selling price and the continued under-utilization of its plant. The company also said it would buyback $500 million of its stock in fiscal year 2016.

Cree said that in light of pressures in the current quarter and a more conservative pricing outlook for fiscal 2016, it is increasing LED reserves.

The company said the restructuring measures would entail charges of $85 million, mainly in the fourth quarter, with the balance in the first half of fiscal 2016. The actions would help it cut excess capacity and costs, Cree said.

For the fourth quarter of fiscal 2015, the company now expects sales of about $375 million, down from prior guidance of $420 million to $440 million. Analysts polled by Thomson Reuters expect sales of $430.8 million.

For the fiscal year 2016, Cree expects sales of about $1.8 billion, while analysts expect $1.89 billion.

Cree shares were down $1.81 or 5.92% at $28.75 in after-hours trade on the Nasdaq.