If you are an investor, you might want to think twice before purchasing the shares of Cree, Inc. (NASDAQ:CREE) or Agrium Inc. (TSE:AGU). According to Jim Cramer of CNBC, the pre-announced earnings of Cree is a clear indication that the company isn’t doing well.

Cramer said that the fact that Cree, Inc. (NASDAQ:CREE) has projected a 20% reduction year-over-year in LED chip and component sales due to declining global demand is a worrying trend that cannot be overlooked by investors. He said that his biggest worry for the company is actually the weakening demand since it’s one of the most difficult challenges to face for any business.

The decline in demand for a company’s products or services can be as a result of better options from competitors, lower spending power, and a host of other factors. To be able to overcome such challenges is no mean feat, since some of these factors may not be within the company’s power to influence.

Cree, Inc. (NASDAQ:CREE) saw its value slump 14.3% to trade at $33.97 after the company lowered its projected earnings. In the revised earnings, the company reduces earlier projections of between $440 and $465 million to $428 million.

Agrium Inc. (TSE:AGU), a fertilizer producing company, too was tagged by Cramer, citing that the company’s performance in the pre-announced quarterly results was something to worry about. The company’s performance was below expectations. The company’s reason, according to the report, is that there were stronger growing conditions, resulting in reduced demand for fertilizer.

“You just don’t need a lot of fertilizer when things are real good,”

Cramer said.

Agrium Inc. (TSE:AGU) shares has faced a downturn since the pre-announcement that expects earnings below analysts’ estimates of $0.64 a share. The company indicated that the earnings are expected to be somewhere between $0.45 and $0.55. Analysts also had the company’s fourth quarter earnings estimated at $0.98 while that expected according to the company is $0.87.

The stock has received a buy rating from Canaccord Genuity Corp, although the firm has revised the price target downwards by 1.9%. Piper Jaffray on the other hand maintains its neutral rating with a 4.2% downward revision of the company’s target price.

Cramer couldn’t mince his words on the revelation that both Cree, Inc. (NASDAQ:CREE) and Agrium Inc. (TSE:AGU) have lowered their earnings due to declining sales. He said:

“People sell first and ask questions later. All of those are going to be weaker. The whole complex.”