Wolfspeed WOLF reported a third-quarter fiscal 2024 non-GAAP loss of 62 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents per share but broader than the year-ago quarter’s loss of 34 cents per share.
Revenues of $200.7 million increased 4.2% year over year but lagged the consensus mark by 0.39%. Mohawk Valley Fab contributed $28 million in revenues in the reported quarter.
Power Products accounted for 50.9%, while Materials Products contributed 49.1%. Power Products revenues increased 0.5% year over year to $102.1 million. Materials Products revenues increased 8.4% year over year to $98.6 million.
Power device design-ins were $2.8 billion in the reported quarter. Quarterly design wins were $0.9 billion, with 70% related to automotive applications.
Wolfspeed Price, Consensus and EPS Surprise 
Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed Quote
Operating Details
In the fiscal third quarter, Wolfspeed reported a non-GAAP gross margin of 15%, down from 33.9% reported in the year-ago quarter.
In the reported quarter, sales, general and administrative expenses were $55.8 million (27.8% of total revenues), up 1.3% year over year.
Research & development expenses (26.2% of total revenues) increased 23.8% year over year to $52.5 million.
Wolfspeed incurred $14.4 million of factory start-up costs and $30.4 million of underutilization costs in the third quarter of fiscal 2024.
The company incurred a non-GAAP operating loss of $79 million, wider than the operating loss of $66.6 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, WOLF had cash, cash equivalents and short-term investments of $2.55 billion compared with $2.64 billion as of Dec 31, 2023.
Free cash outflow was $616 million, comprising $136 million of operating cash outflow and $480 million of capital expenditures.
Guidance
For fourth-quarter fiscal 2024, Wolfspeed expects revenues in the range of $185-$215 million. Non-GAAP loss is expected to be 72-86 cents per share.
The company expects Mohawk Valley fab to contribute nearly $40-$50 million in revenues in the fourth quarter of fiscal 2024.
It expects non-GAAP gross margin in the range of 8-16%. Non-GAAP operating expenses are expected between $116 million and $122 million.
Zacks Rank & Stocks to Consider
Currently, Wolfspeed carries a Zacks Rank #3 (Hold).
Arista Networks ANET, AMETEK AME and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader sector. While Arista Networks sports a Zacks Rank #1 (Strong Buy) at present, AMETEK and NVIDIA carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 8.3% year to date. ANET is set to report its first-quarter 2024 results on May 7.
AMETEK shares have gained 5.5% year to date. AME is set to report its first-quarter 2024 results on May 2.
NVIDIA shares have gained 67.6% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.
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