Investing.com -- Shares in Cree Inc (NASDAQ:CREE), one of the world's leading providers of LED lighting materials and devices, plummeted more than 17% in after-hours trading after the company lowered its third quarter revenue and earnings forecasts on Tuesday.
Cree, which was founded by researchers from North Carolina State in 1987, issued the lower guidance amid wide ranging product delays and customer service disruptions over the quarter. The Durham, North Carolina-based company now expects to finish the quarter with revenues around $365 million, sharply below initial targets between $400 and $430 million. At the same time, Cree reduced its quarterly earnings outlook to 0.13 and 0.15 per share, from previous guidance of 0.22 to 0.29.
Upon closer inspection, Cree anticipates revenues from its lighting products division to be around$185 million, below previous estimates, due primarily to interruptions related to its ERP system conversion, new product delays and a slower than anticipated first quarter forecast calendar. The company anticipates revenues from its LED products and Power and RF products division to be in line with previous targets.
"I believe we've addressed the root causes that led to our recent business challenges," said Chuck Swoboda, Creed CEO. "While it's premature to provide specific targets at this time, the order rate in commercial lighting improved in March, and we're optimistic that this, combined with demand for new products, will begin to drive growth in fiscal Q4."
Also during the quarter, Cree repurchased 0.6 million shares of its common stock under the company's stock buyback program at an average price of $28.15 per share. Currently, the company said there is $350 million in aggregate purchase price value remaining in the repurchase program. The buyback initiative expires in late-June.
Shares in Cree fell 5.10 or 17.56% to 23.95 in after-hours trading.