Cree, Inc. (CREE) was up as much as 16 percent at one point during Tuesday’s trading with shares trading at $51.70. The gains come as the company announced it will be offering a new 40-watt light-emitting diode bulb for $9.97, to be sold exclusively at Home Depot (HD) outlets throughout the country.
This marks the first time that energy saving LED bulbs have dug below the $10 barrier that has been seen as a deterrent to a broader, more effective, market-driven contribution to energy conservation. The company says that it is confident that the new lower price will be the next big step in convincing a greater number of consumers to eschew traditional incandescent bulbs for the LED model.
The company also announced the release of a 60-watt version of the bulb for $12.97, as well as a 60-watt “daylight” variation, for a dollar more. All of these bulbs use 84 percent less energy and last much longer than their incandescent counterparts, and Home Depot will be offering a 10-year warranty on the whole line of products.
The news comes as Cree raised its earnings target for the quarter from $0.30-$0.35 per share to $0.31-$0.36 per share, against a $0.33 estimate. Revenue for the quarter ending March 31 was forecast in January at $325 million to $345 million, against estimates of $336 million, but that expectation has also been increased to $335 million to $350 million.
Meanwhile, Home Depot’s shares are up one-tenth of a percentage point, trading at $70.36.
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