Cree, Inc. CREE is slated to report third-quarter fiscal 2019 earnings results on May 1.Performance in Q2Cree delivered non-GAAP earnings of 23 cents per share in second-quarter fiscal 2019, beating the Zacks Consensus Estimate of 17 cents. Notably, the company reported loss of one cent in the year-ago quarter.The company’s revenues totaled $413.04 million, up 12% year over year. The figure surpassed the Zacks Consensus Estimate by 0.92%.Factors at Play in Q3In the third quarter, Cree inked a deal to divest its Lighting Products business unit (or “Cree Lighting”) to IDEAL INDUSTRIES, INC., with an aim to focus on its RF power business. The agreement, worth approximately $310 million, includes the company’s LED lamps, lighting fixtures, and corporate lighting solutions.Per the terms of the deal, Cree is expected to “receive an initial cash payment of $225 million.”On the back of the divestiture, Cree updated its third quarter guidance, as Cree Lighting will be reported under “discontinued operations”. The company will divulge further details in upcoming conference of third-quarter earnings results.Management now envisions revenues to come in the range of $271-$277 million, compared with previous guidance of $385-$405 million.The Zacks Consensus Estimate for revenues is currently pegged at $274.7 million, indicating a decline of 22.8% from the year-ago quarter.The company projected earnings in the range of 14-18 cents per share, compared with previous guidance of 13-19 cents.Notably, estimates have remained unchanged in the past 30 days. The Zacks Consensus Estimate for earnings is pegged at 16 cents per share, compared with year-ago reported earnings of 4 cents.Focus on RF: Key CatalystCree’s continued cost cutting measures and recovery in utilization rates is expected to positively impact to-be-reported quarter results. Further, the company’s cross licensing agreements are expected to boost adoption, favoring top-line growth prospects in the upcoming quarterly results.Notably, Cree is benefiting from the acquisition of assets of Infineon Technologies’ RF Power Buisness. The buyout expanded its Wolfspeed portfolio, with robust power and RF GaN-on-SiC power solutions. This is expected to reflect positively in the third-quarter financials.We also note that the buyout of RF Power business will aid to the company in enhancing its competitive position against peers in power solutions market like Analog Devices ADI, Qorvo QRVO, among others. Furthermore, this acquisition will poise the company well in aiding faster 5G networks, which bodes well.Notably, the company projects Wolfspeed revenues to lie in the range of $139-$141 million. The Zacks Consensus Estimate for Wolfspeed revenues is pegged at $155 million, compared with year-ago reported figure of $81.9 million.In the third quarter, Cree unveiled new LED solutions, namely, XLamp0 XP-E2 Photo Red (based on 660 nm) and Far Red (based on 730 nm) targeted at horticulture applications. The incremental revenues from the adoption of latest solutions are expected to favor the to-be-reported-quarter results. Management projects LED Products revenues between $132 million and $136 million. Cree, Inc. Price and EPS Surprise Cree, Inc. Price and EPS Surprise | Cree, Inc. QuoteWhat Our Model SaysAccording to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.Cree has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stock to ConsiderHere is a stock you may consider, as our proven model shows that it has the right combination of elements to post an earnings beat this quarter.Square, Inc. SQ has an Earnings ESP of +5.50% and a Zacks Rank #2. The company is scheduled to report first-quarter 2019 results on May 1. You can see the complete list of today’s Zacks #1 Rank stocks here.Today's Best Stocks from ZacksWould you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.See their latest picks free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Square, Inc. (SQ): Free Stock Analysis Report Qorvo, Inc. (QRVO): Free Stock Analysis Report Analog Devices, Inc. (ADI): Free Stock Analysis Report Cree, Inc. (CREE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research