We expect SemiLEDs stock to move tonight and tomorrow (LEDS) following its just reported earnings. The earnings report was slightly better than expected. We have the details of this report and our thoughts below:

Revenue for the first quarter of fiscal 2018 was $2.0 million, a 22% decrease compared to $2.6 million in the fourth quarter of fiscal 2017. GAAP net loss for the first quarter of fiscal 2018 was $0.4 million, compared to a loss of $0.7 million in the fourth quarter of 2017, or a net loss of $0.11 per diluted share, compared to a net loss of $0.19 per diluted share for the fourth quarter of fiscal 2017.

GAAP gross margin for the first quarter of fiscal 2018 was 3%, compared with gross margin for the fourth quarter of fiscal 2017 of 6%. Operating margin for the first quarter of fiscal 2018 was negative 43%, compared with negative 31% in the fourth quarter of fiscal 2017. The Company’s cash and cash equivalents was $3.4 million at November 30, 2017, compared to $3.6 million at the end of fiscal 2017.

The company also projected its second quarter. They said:

“We expect revenue for the second quarter ending February 28, 2018 to be about $1.6 million +/- 10%.

As part of our cost reduction efforts, during the second quarter ending February 28, 2018, we intend to move and consolidate our LED packaging facility to our headquarters in Chunan, Taiwan.”

Quad7Capital currently believes this name should be traded only. An investment is considered high risk.

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