Cree to restructure LED business, cuts revenue forecast

By Reuters

Jun 24, 2015 07:23 PM EDT

Cree Inc said it would reduce manufacturing capacity at its light-emitting diode factory, as it struggles with a decline in prices, and take an $85 million restructuring charge.

Shares of Cree, which makes lighting and semiconductor products, were down 8 percent in extended trading.

The company also lowered its revenue forecast for the fourth quarter and said it would buy back $500 million worth of stock for the next fiscal year.

Cree said on Wednesday it would take the charge in the fourth quarter ending June 28 and the first half of the next fiscal year. The charge includes $27 million for "channel revenue reserves", which would affect fourth-quarter revenue.

The company said it now expects revenue of $375 million for the current quarter, down from the $420 million-$440 million it expected earlier.

Cree forecast revenue to increase to about $1.8 billion for the next fiscal year. The company had recorded revenue of $1.65 billion for the year ended June 29, 2014.

The Durham, North Carolina-based company recalled about 700,000 lamps this month due to potential burn hazards after it received four reports of lamps overheating and melting.

Cree shares have fallen about 5 percent this year through Wednesday.

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