Cree's Stock Slumps After Restructuring Announcement, Downbeat Sales Outlook

By MarketWatch Pulse

Cree Inc.'s stock slumped 3.3% in active after-hours trade Wednesday, after the company said it would restructure its LED products business, and provided a downbeat fiscal fourth-quarter revenue outlook, as a result of a more aggressive LED pricing environment than previously anticipated. The company said it expects to take a restructuring charge of $85 million, as it cuts capacity and overhead expenses. Cree said it was also increasing LED revenue reserves. The company now targets fiscal fourth-quarter revenue of $375 million, which includes $27 million in the increased LED revenue reserve, compared with the FactSet consensus of $431 million. Separately, the company announced a $500 million share repurchase program for fiscal 2016. The stock has lost 20% over the past three months through Wednesday's close, while the S&P 500 has gained 0.8%.

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