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Wolfspeed (WOLF) Reports Loss in Q4 Earnings, Revenues Down Y/Y
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Wolfspeed (WOLF - Free Report) reported a fourth-quarter fiscal 2024 non-GAAP loss of 89 cents per share, wider than the Zacks Consensus Estimate of a loss of 84 cents per share but narrower than the year-ago quarter’s loss of 36 cents per share.
Revenues of $200.7 million decreased 1% year over year but lagged the consensus mark by 0.2%. Mohawk Valley Fab contributed $41 million in revenues in the reported quarter.
Power Products accounted for 52.1%, while Materials Products contributed 47.9%. Power Products revenues decreased 2.3% year over year to $104.6 million. Materials Products revenues increased 0.5% year over year to $96.1 million.
Power device design-ins were $2 billion in the reported quarter. Quarterly design wins were $0.5 billion.
Wolfspeed’s Operating Details
For the fiscal fourth quarter, Wolfspeed reported a non-GAAP gross margin of 5.4%, down from 30.7% reported in the year-ago quarter. Underutilization costs of $24 million negatively impacted gross margin in the reported quarter.
In the reported quarter, sales, general and administrative expenses were $60 million (29.9% of total revenues), up 37.6% year over year.
Research & development expenses (30.7% of total revenues) increased 4.8% year over year to $61.6 million.
Wolfspeed incurred $20.5 million in factory start-up costs in the fourth quarter of fiscal 2024.
The company incurred a non-GAAP operating loss of $118.9 million, wider than the operating loss of $66.8 million in the year-ago quarter.
WOLF’s Balance Sheet & Cash Flow
As of Jun 30, 2024, WOLF had cash, cash equivalents and short-term investments of $2.17 billion compared with $2.55 billion as of Mar 31, 2024.
Long-term debt was $3.13 billion as of Jun 30, 2024.
Free cash outflow was $885.3 million, comprising $239.5 million of operating cash outflow and $644.2 million of capital expenditures.
Guidance
For first-quarter fiscal 2025, Wolfspeed expects revenues in the range of $185-$215 million. Non-GAAP loss is expected between 90 cents and $1.09 per share.
The company expects Mohawk Valley Fab to contribute nearly $20-$30 million in revenues in the first quarter of fiscal 2025.
It expects non-GAAP gross margin in the range of 13-20%. Non-GAAP operating expenses are expected to be $109 million, including $13 million of start-up costs.
Zacks Rank & Stocks to Consider
Currently, Wolfspeed carries a Zacks Rank #4 (Sell).
WOLF shares have declined 69% year to date, underperforming the Zacks Computer & Technology sector’s return of 22.7%.
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Wolfspeed (WOLF) Reports Loss in Q4 Earnings, Revenues Down Y/Y
Wolfspeed (WOLF - Free Report) reported a fourth-quarter fiscal 2024 non-GAAP loss of 89 cents per share, wider than the Zacks Consensus Estimate of a loss of 84 cents per share but narrower than the year-ago quarter’s loss of 36 cents per share.
Revenues of $200.7 million decreased 1% year over year but lagged the consensus mark by 0.2%. Mohawk Valley Fab contributed $41 million in revenues in the reported quarter.
Power Products accounted for 52.1%, while Materials Products contributed 47.9%. Power Products revenues decreased 2.3% year over year to $104.6 million. Materials Products revenues increased 0.5% year over year to $96.1 million.
Power device design-ins were $2 billion in the reported quarter. Quarterly design wins were $0.5 billion.
Wolfspeed’s Operating Details
For the fiscal fourth quarter, Wolfspeed reported a non-GAAP gross margin of 5.4%, down from 30.7% reported in the year-ago quarter. Underutilization costs of $24 million negatively impacted gross margin in the reported quarter.
Wolfspeed Price, Consensus and EPS Surprise
Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed Quote
In the reported quarter, sales, general and administrative expenses were $60 million (29.9% of total revenues), up 37.6% year over year.
Research & development expenses (30.7% of total revenues) increased 4.8% year over year to $61.6 million.
Wolfspeed incurred $20.5 million in factory start-up costs in the fourth quarter of fiscal 2024.
The company incurred a non-GAAP operating loss of $118.9 million, wider than the operating loss of $66.8 million in the year-ago quarter.
WOLF’s Balance Sheet & Cash Flow
As of Jun 30, 2024, WOLF had cash, cash equivalents and short-term investments of $2.17 billion compared with $2.55 billion as of Mar 31, 2024.
Long-term debt was $3.13 billion as of Jun 30, 2024.
Free cash outflow was $885.3 million, comprising $239.5 million of operating cash outflow and $644.2 million of capital expenditures.
Guidance
For first-quarter fiscal 2025, Wolfspeed expects revenues in the range of $185-$215 million. Non-GAAP loss is expected between 90 cents and $1.09 per share.
The company expects Mohawk Valley Fab to contribute nearly $20-$30 million in revenues in the first quarter of fiscal 2025.
It expects non-GAAP gross margin in the range of 13-20%. Non-GAAP operating expenses are expected to be $109 million, including $13 million of start-up costs.
Zacks Rank & Stocks to Consider
Currently, Wolfspeed carries a Zacks Rank #4 (Sell).
WOLF shares have declined 69% year to date, underperforming the Zacks Computer & Technology sector’s return of 22.7%.
Adobe (ADBE - Free Report) , Smartsheet (SMAR - Free Report) and NVIDIA (NVDA - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Each of the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adobe shares have lost 5.2% year to date. ADBE is set to report its third-quarter fiscal 2024 results on Sep 12.
Smartsheet shares have gained 3.9% year to date. SMAR is set to report its second-quarter fiscal 2025 results on Sep 5.
NVIDIA shares have gained 159.4% year to date. NVDA is set to report its second-quarter fiscal 2025 results on Aug 28.