Cree, Inc. announced unaudited consolidated earnings results for the second quarter and six months ended December 27, 2015. For the quarter, the company's revenue, net was $435,806,000 compared to $413,157,000 a year ago. Operating income was $9,432,000 compared to $10,185,000 a year ago. Income before income taxes was $17,447,000 compared to $11,913,000 a year ago. Net income was $13,958,000 or $0.14 per diluted share compared to $12,151,000 or $0.10 per diluted share a year ago. Non-GAAP operating income was $35,497,000 compared to $34,000,000 a year ago. Non-GAAP net income was $30,475,000 or $0.30 per diluted share compared to $37,949,000 or $0.33 per diluted share a year ago. Cash flows from operations were $76,962,000 compared to $14,768,000 a year ago.

For the six months, the company's revenue, net was $861,295 compared to $840,829,000 a year ago. Operating income was $742,000 compared to $21,642,000 a year ago. Loss before income taxes was $14,049,000 compared to income before income taxes of $26,274,000 a year ago. Net loss was $9,665,000 or $0.09 per diluted share compared to net income of $23,281,000 or $0.20 per diluted share a year ago. Non-GAAP operating income was $64,852,000 compared to $69,227,000 a year ago. Non-GAAP net income was $52,594,000 or $0.51 per diluted share compared to $66,750,000 or $0.56 per diluted share a year ago. Cash flows from operations were $123,796,000 compared to $28,052,000 a year ago.

For its third quarter of fiscal 2016 ending March 27, 2016, the company targets revenue in a range of $400 million to $430 million, with GAAP gross margin targeted to be 31.0%+/- and non-GAAP gross margin targeted to be 31.7%+/-. GAAP gross margin targets include stock-based compensation expense of approximately $3 million, while non-GAAP targets do not. GAAP operating expenses are targeted to be approximately $119 million, and non-GAAP operating expenses are targeted to be approximately $100 million. The tax rate is targeted at 20%+/- for the third quarter of fiscal 2016. GAAP net income is targeted at $4 million to $11 million, or $0.04 to $0.11 per diluted share, excluding any net changes associated with Cree's Lextar investment. Non-GAAP net income is targeted in a range of $22 million to $29 million, or $0.22 to $0.29 per diluted share.

For fiscal 2016, the company is targeting property, plant and equipment spending at $135 million plus or minus. The company spent $89 million during the first half of the fiscal year primarily on existing infrastructure projects. The remaining $46 million targeted to be spent during the second half of the year will be to finish the infrastructure projects and provide incremental capacity for Lighting and Wolfspeed. The company is target approximately $100 million in free cash flow for fiscal 2016. fiscal 2016 tax rate to be 20%. The third quarter and fiscal 2016 tax rate is lower than previous targets, primarily due to the impact from the permanent reinstatement of the U.S. R&D tax credit.