SOURCE: The Bedford Report

The Bedford Report

April 27, 2011 08:16 ET

Veeco and Cree Head in Different Directions in Crowded LED Sector

The Bedford Report Provides Analyst Research on Cree & Veeco Instruments

NEW YORK, NY--(Marketwire - Apr 27, 2011) - The light-emitting diode (LED) market has grown this year due to the rise in sales of consumer electronics products such as mobile phones and television screens. In addition, LEDs are on the verge of overtaking both incandescent and fluorescent light bulbs in terms of use, as governments, businesses and consumers seek to curb emissions. The rise in LED popularity has led to an overcrowded industry, while a sudden surge in government-backed Chinese LED makers has eaten into the market shares held by the likes of Cree. The Bedford Report examines the outlook for companies in the semiconductor equipment and materials industry and provides research reports on Cree, Inc. (NASDAQ: CREE) and Veeco Instruments, Inc. (NASDAQ: VECO). Access to the full company reports can be found at:

Reflecting on the industry in general, Cree CEO Chuck Swoboda believes the huge increase in chip production to service LED backlighting applications in recent years has put pressure on the rest of the market. Weak demand in backlighting has meant that lots of spare LED chips are now available for other applications.

Last week Cree said that net income in its fiscal third quarter fell 58 percent to $18.9 million, or 17 cents per share, down from $44.6 million, or 41 cents per share, in the same period a year earlier. Revenue fell 6 percent to $219 million from $234 million. For the fourth quarter, Cree is forecasting revenue of $225 million to $245 million, with earnings seen at 25 cents to 31 cents per share.

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Veeco posted strong quarterly earnings. On Tuesday the company said that its first-quarter profit more than doubled as improved orders for data storage and its line of LED and solar products helped drive an surge in revenue. Veeco reported net income of $53.1 million, or $1.25 a share, for the three months ended March 31. That compares favorably with net income of $22.8 million, or 54 cents a share, in the prior year period. Veeco CEO John Peeler said the company is confident it is in a good position to grow its LED and solar, and data storage businesses this year and beyond.

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