Triangle-Based Cree Pinched By Huawei Sales Ban
Triangle-based tech company Cree is feeling pressure from U.S. trade disputes with China. CEO Gregg Lowe detailed the company's fourth quarter earnings in a conference call Tuesday.
“The current operating environment is very challenging,” said Lowe. “Geopolitical and macroeconomic issues impacted our financial results in the fourth quarter, and we expect them to present some additional headwinds in Q1 of 2020 and perhaps beyond.”
The company reported revenue of $251 million for the fourth quarter of 2019, down 5% compared to this time last year. Overall, the company reported more than $1.1 billion dollars in revenue for fiscal year 2019, a 17% increase over last year's earnings.
But Cree has been unable to ship products worth $15 million to Chinese tech firm Huawei since the U.S. enacted a ban on sales to the company in May.
“Regarding Huawei, we are not shipping product at this time, and we will continue to comply with U.S. federal law," said Chief Financial Officer Neill Reynolds. “We’ve applied for licenses from the government to potentially resume shipments to our customer, but we’ve not yet received a response.”
Lowe noted even if the ban is lifted, it would take time to incorporate Cree products back into Huawei’s supply chain.
Cree officials said they're also keeping an eye on changes to the Chinese market for electric cars, which could impact one of the company's product lines.