..and with pre-tax operating margins of approximately 40% the company will probably be able to bank another $100 million in the next 5 quarters. In addition - operating leverage is such that as LG royalties start to kick in, the margins will actually begin to expand. But if you believe the wheels fall off the UDC car in a year or two, then yes, sell the stock...but if you believe that in 10 years we will have fold-able smartphones (with 3 or 4 times the screen size); OLED TVs priced for the masses; OLED panels in car interiors as well as for tail lights; OLED lighting in the mainstream as well as new uses for OLEDs that we cant even imagine, and you believe that UDC will be collecting royalties and selling emitters and other systems products to OEMs then you will look back at 2015 and say "you mean I could have bot UDC when it was selling for only 3 times book value and 13 times forward cash flows?!"
Yes management erased a lot of credibility with the $33 million write-off, but the host business was never part of the long term thesis...and had/has nothing to do with the aforementioned growth of the OLED industry.
what is fascinating (if these rumors are true) is that in all likelihood the phone would not only have the large "fold-able" screen on the inside, but it would probably continue to have a screen on the outside. In others words, from a square cm of screen perspective, each phone might have triple the amount of cm2 of OLED screens vs today's Galaxy S6...and since the emitter revenue UDC receives is highly correlated to the cm2 of screen coverage, emitter rev per phone produced could be as much as three times what it is today. And of course, if the phone turns out to be wildly successful, then Samsung's smartphone market-share would rise as well.
weakness caused by CIBC downgrade....analyst has no inside knowledge...a further gift ($7.07)
While there are a number of print reports on the speech (including a press release from LG Display) it would be great to actually see the address itself...has anyone found a link to the webcast?
he left Perdue back in March and didn't join PRSN until recently...doesn't sound like he was "wooed" from Perdue but rather was out on the street...
the process continues...the market turbulence does not affect bidders desire to buy these assets...yet the stock price is almost as low as it was before they announced their intention to "look at strategic alternatives"
This morning i also got an email ad from Best Buy with the same tagline. Clearly they have the TVs in stock; hopefully an indication of improving yields at the LG fabs.
I am planning on buying a flat 65 version this fall.
The TV reviewer from Forbes did a test to rank smartphone's viewing experience. Clear winner - Samsung S6.
The only problem is that he didn't attribute the victory to the fact that it has an OLED screen...which we all know is the case.
from a Bloomberg article: "Joly and McCollam (BestBuy CEO and CFO) have complained about a lack of hot new tech products that could help drive sales -- a problem for the broader electronics industry. Given that reality, Best Buy is searching for ways to generate sales growth on its own. That’s included revamping its website, selling more returned items, and adding space dedicated to home-theater setup."
OLED TVs play into the "hot new tech" and should also help on the home-theater front.
Yes it stinks that UDC wrote off $33 million of Host inventory, and yes it is a black eye on management that they did not see it coming and be able to shut the spigot off before it got as big as it did, and yes IR should have made an effort to encourage estimates to be more back of year loaded so the "miss" wasn't as large,,,but didn't everyone know (you would if you were paying attention) that Host was a dwindling "commodity" like business?
So what else changed? Did the future of TVs suddenly eliminate OLEDs? NO. To that end did company management (who has more viability than we do) take the opportunity to bring DOWN Y15 revenue estimates given that Host was obviously in their original calculus? NO they kept it the same. How about next year?...any reduction in LGs TV production plans? Have we heard that SMD is pulling back from being a merchant provider of OLED screens for mobile phones? NO; in fact we now hear that Huawei (third largest smartphone manufacturer behind Apple and Samsung) will probably come out with a OLED screened phone (with the screen made by SMD). (and as those who follow the company closely know, SMD has had excess mobile capacity post the S4 success, and so merchant sales to others will not only sop up that capacity, but encourage SMD to bring more capacity on.) Did flexible displays suddenly disappear from the horizon? NO, in fact there are a number of OEMs (including SMD and LG) who are bringing on flexible capacity. How about lighting? Are we reverting back to Edison's original design? NO, there doesn't seem to be a day that passes without some sort of OLED lighting announcement.
What HAS changed is the price of the stock...now under $40...so when the stock was $55 OLEDs were going to take over the world...now 30% lower it seems like OLED's future is being questioned, but yet there is no evidence to support that conclusion..In other words, very little has changed....except the price of the shares.
$7.50/share in cash 75% GMs..
if you look at the Q form Q3'14 and assume that all of the sales to Japan (or virtually all) were host sales (remember that UDC would sell to NSCC who would then sell to SMD) you will see that Q3 host was probably around 8.5 million (vs 13.1 from Q3 '13) and for the 9 months it was $33.5 in '14 and $28.2 in '13...so host sales peaked in the first two Qs of 14...and have been trending down ever since...thus a big hole to fill, but the company is doing it (with emitters which have higher margins)
two minor niggles...there was a GAS leak...not a fire (at LG)... and they said that the royalty report they received was from the first quarter...they don't look at it as a 2 month royalty (even though the royalty was only earned on sales post Jan 26...or whatever date the agreement was signed)...in other words, they will not clarify it any further, but we can assume that it was only from panel sales that occured in Q1 AFTER the agreement was signed...