Cree announced mixed fiscal fourth quarter and year-end financial results on August 11. For Q4, company revenue was $382 million, down 6.7 percent from the prior quarter and down 12 percent from the year-ago quarter. For the full year (FY2015), Cree revenue was $1.63 billion, down 0.9 percent from FY2014.
Cree's LED chip segment, struggling against excess capacity in the industry and significant price erosion, saw revenue decline 21 percent in Q4. In June, Cree announced the LED business would be restructured to reduce capacity and costs. During the earnings call, CFO Michael McDevitt said the company took an $84 million restructuring charge in Q4, with an additional $18 million planned during Q1.
Cree's lighting products segment fared better during the quarter. Revenue increased 2.2 percent sequentially to $229 million, 10 percent above the year-ago quarter.
With 92 percent of the company's revenue from LED lighting, the Power and RF Products segment is rarely mentioned during the earnings calls. Nevertheless, revenue and margin are reported. Power and RF Products revenue was $30.8 million in Q4, down 0.8 percent from Q3 and 7.6 percent above Q4 of 2014. Gross margin was 52.5 percent, compared to 53.1 percent in Q3 and 56.9 percent in Q4 of 2014.
For the full year, Power and RF Products revenue was $123.9 million, a 15 percent increase over fiscal 2014. Gross margin was 54.7 percent, compared to 56.5 percent in 2014, although it increased $7 million from the prior year. McDevitt said the gains were "driven by growth in our power products."
Looking to Q1 of fiscal 2016, McDevitt expects "incrementally higher Power and RF revenue."
In June, Cree announced the possibility of an initial public offering (IPO) of shares in Power and RF Products to raise funds to support growth. Cree would remain the majority shareholder and would continue to report the segment's results as part of Cree. During the earnings call, CEO Chuck Swoboda identified the growth of the Power and RF Products segment as the company's third priority in 2016. Listen to his comments.