SOURCE: Five Star Equities

Five Star Equities

February 02, 2012 08:20 ET

Cree and Universal Display Face Margin Pressure as LED Prices Deteriorate

Five Star Equities Provides Stock Research on Cree & Universal Display Corporation

NEW YORK, NY--(Marketwire - Feb 2, 2012) - Companies focused on the manufacturing of Light Emitting Diodes (LEDs) have struggled in the New Year as an influx of Chinese companies has boosted competition in the industry. The fierce competition has cut prices, squeezed profit margins and inflated supplies, Reuters reports. Five Star Equities examines the outlook for companies in the Semiconductor (LED) Industry and provides equity research on Cree, Inc. (NASDAQ: CREE) and Universal Display Corporation (NASDAQ: PANL). Access to the full company reports can be found at:

The LED industry is expected to be a "low margin business," Wunderlich Securities analyst Theodore O'Neil explains. "Demand is going to be awesome," O'Neill said, pointing to the 50 percent drop in prices on LED lightbulbs at home improvement retailers like Home Depot and Lowe's.

VantagePoint Capital Partners expects prices for LEDs to "plummet" within three years as competition intensifies to satisfy surging demand for energy-efficient lights. Prices for LEDsmay fall 90 percent by 2015, said Alan Salzman, chief executive officer of VantagePoint Capital Partners.

Five Star Equities releases regular market updates on the Semiconductor (LED) industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Last month Cree reported fiscal second quarter net income of $28.7 million, or 25 cents per share, after excluding stock-based compensation and amortized goodwill -- down 53 percent from a year ago. Revenue rose 18 percent to $304.1 million but was below analysts' expectations of $309.85 million. For the third quarter, Cree expects revenue of $290 million to $310 million, well below analysts' estimates of $320.87 million, according to Thomson Reuters.

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