Wolfspeed Misses Q1 Estimates: Will Weak Q2 Outlook Drag Shares Down?

Wolfspeed WOLF reported a first-quarter fiscal 2025 non-GAAP loss of 91 cents per share, which increased from the year-ago quarter’s loss of 53 cents per share. The figure missed the Zacks Consensus Estimate by 9.90%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Revenues of $194.7 million decreased 1.4% year over year and lagged the consensus mark by 2.71%. Mohawk Valley Fab contributed $49 million in revenues in the reported quarter.Power Products accounted for 49.9%, while Materials Products contributed 50.1%. Power Products revenues decreased 4.1% year over year to $97.1 million. Materials Products revenues increased 1.5% year over year to $97.6 million.Wolfspeed Price, Consensus and EPS Surprise Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed QuotePower device design-ins were $1.5 billion in the reported quarter. Quarterly design wins were $1.3 billion.WOLF's Operating DetailsIn the fiscal first quarter, Wolfspeed reported a non-GAAP gross margin of 3.4%, down from 15.6% reported in the year-ago quarter. Underutilization costs of $26.4 million negatively impacted gross margin in the reported quarter.In the reported quarter, sales, general and administrative expenses were $62.2 million (31.9% of total revenues), down 3% year over year. Research & development expenses (26.1% of total revenues) increased 15.4% year over year to $50.9 million.Wolfspeed incurred $19.7 million in factory start-up costs in the first quarter of fiscal 2025.The company incurred a non-GAAP operating loss of $113 million, wider than the operating loss of $72.3 million in the year-ago quarter.WOLF’s Balance Sheet & Cash FlowAs of Sept. 29, 2024, WOLF had cash, cash equivalents and short-term investments of $1.68 billion compared with $2.17 billion as of June 30, 2024.Long-term debt was $3.14 billion as of Sept. 29, 2024.Free cash outflow was $528.2 million, comprising $132 million of operating cash outflow and $395 million of capital expenditures.WOLF Initiates Weak 2Q25 GuidanceFor second-quarter fiscal 2025, Wolfspeed expects revenues in the range of $160-$200 million. Non-GAAP loss is expected to be between $1.14 per share and $0.89 per share. The company expects Mohawk Valley Fab to contribute nearly $50-$70 million in revenues in the second quarter of fiscal 2025.The company targets a non-GAAP gross margin of -6% to +6%.Wolfspeed expects fiscal second-quarter 2025 non-GAAP operating expenses of $110 million, marking a $10 million decrease from the prior quarter and reflecting a 15% reduction from fiscal fourth-quarter 2024 due to restructuring actions and cost-saving measures.WOLF shares have plunged 68.5% year to date, underperforming the Zacks Computer & Technology sector’s return of 25.1%. Dull guidance might potentially hurt the company’s share price in the near term. Investors often react to future projections and less optimistic outlooks can lead to selling pressure.WOLF's Zacks Rank & Stocks to ConsiderCurrently, Wolfspeed carries a Zacks Rank #3 (Hold).Shopify SHOP, BiliBili BILI and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader sector. While SHOP sports Zacks Rank #1 (Strong Buy), BILI and NVIDIA carry Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Shopify shares have risen 4.9% year to date. SHOP is set to report its third-quarter 2024 results on Nov. 12.Bilibili shares have gained 82% year to date. BILI is set to report its third-quarter 2024 results on Nov. 14.NVIDIA shares have gained 194% year to date. NVDA is set to report its third-quarter fiscal 2025 results on Nov. 20.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Wolfspeed (WOLF): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis Report Bilibili Inc. Sponsored ADR (BILI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks