SemiLEDS (LEDS) Smashed On Poor Guidance

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11:01:20 am on January 13, 2011

SemiLEDs Corporation (LEDS) which is currently the top China LED play trading on a US exchange is getting hit hard today after reporting earnings.  While the company reported big quarterly growth once again, guidance isn’t nearly as impressive and traders are heading for the exits.

The company reported an EPS of .14/share on revenues of $13 million which is a big jump over the year ago quarter of just .01/share on revenues of $6.7 million.  It’s almost always about guidance though and the company doesn’t deliver in this department.

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For its second quarter of fiscal 2011 ending February 28, 2011, the company expects some pricing pressure to come into play, but the revenue estimate isn’t great either.  They predict revenue in a range of $10.5 million to $12.5 million with GAAP net income of $0.06 to $0.09 per diluted share, based on an estimated 27.7 million diluted weighted average shares. GAAP gross margin is expected to be in the range of 44% to 46%.

“We are very pleased with our recent accomplishments. We achieved excellent financial results in our first fiscal quarter of 2011 including record revenues and strong gross margins, and successfully completed our IPO in December 2010,” said Trung Doan, Chairman and CEO of SemiLEDs. “The LED lighting market remains strong particularly within Asia and we are well positioned to take advantage of this opportunity both through our Taiwan operations and China SemiLEDs.”

Shares of LEDS are currently down 33% and the previous bullish chart is now broken.  It’s going to take at least a few months for the technical damage to be repaired, but I’m still optimistic that LEDS can provide healthy returns over the long haul.

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