SOURCE: The Bedford Report

The Bedford Report

August 11, 2011 08:16 ET

LED Manufacturers Navigate Near-Term Headwinds for Long-Term Profits

The Bedford Report Provides Equity Research on Cree and Rubicon Technology

NEW YORK, NY--(Marketwire - Aug 11, 2011) - The LED market is experiencing significant headwinds this year as reports from DIGITIMES argue that low orders in July and decreasing growth and prices are hindering the sector's recovery. Long term forecasts remain positive, however, as several countries continue to push for the energy efficiency LEDs offer. The Bedford Report examines the outlook for companies in the semiconductor industry and provides stock research on Cree, Inc. (NASDAQ: CREE) and Rubicon Technology, Inc. (NASDAQ: RBCN). Access to the full company reports can be found at:

The current downturn in the LED market is largely due to reduced prices for LED-based TV backlight and lighting systems. This is because of inventory adjustments, and increased competition from more backlight makers entering the LED lighting makers.

Rubicon Technology CEO Raja Parvez said in a statement that "prolonged weakness in the LED backlighting market is now having an impact" on demand. Parvez says that current pricing for two through four inch diameter cores is "down as much as 60 percent sequentially."

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In the long term, the industry's prospects remain bright. Reports from Frost & Sullivan claim that the light emitting diode (LED) market is primed to grow explosively in the next several years. The study estimated that the market, which earned revenues of almost half a billion in 2010, could reach as high as $2 billion in 2017.

Earlier this week Cree reported a fiscal fourth quarter profit of $19.8 million, or 18 cents a share, down from $52.8 million, or 48 cents a share, a year earlier. For the first-quarter the company forecast profit of 25 cents to 28 cents a share, excluding certain expenses, with revenue between $245 million and $255 million.

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