Amid Tariffs, Cree Expects LED Sales to Fall; Stock Down After Quarterly Results

Cree estimates the first tranche of 25 percent tariffs on Chinese imports that took effect July 6 will reduce earnings by about 2 cents a share in Q1 ending late September and by about 3 cents a share each future quarter, said outgoing (see personals section of the July 24 issue) Chief Financial Officer Mike McDevitt on a Tuesday earnings call. Cree argued unsuccessfully in the first round to defeat tariffs on LEDs it reimports from China and took an additional hit when the second tranche of tariffs to take effect Aug. 23 included other duties. Quarterly guidance doesn’t include “any potential impact of any tariffs” that take effect Aug. 23 or later, said McDevitt. Cree is “evaluating ways” to further reduce the damage, he said. It expects a 6 percent Q1 revenue decline sequentially. Tech interests continue opposing the levies (see 1808140047). The stock closed down 7.8 percent Wednesday at $46.26.