Universal Display stock plunges after 3Q miss

Universal Display stock plunges after third-quarter miss; analyst downgrades to 'Neutral'

Associated Press

NEW YORK (AP) -- Shares of Universal Display Corp., which makes ingredients for displays based on organic light-emitting diodes, plunged to a two-year low Thursday after the company missed third-quarter financial expectations.

THE SPARK: Late Wednesday, the Ewing, N.J., company reported a loss of $5.5 million, or 12 cents per share, for the three months ended Sept. 30. Revenue was $12.5 million.

Analysts polled by FactSet were on average expecting earnings of 2 cents per share on $18.6 million in revenue.

UDC also reduced its revenue outlook for 2012 to a range of $80 million to $82 million, down from a range of $90 million to $110 million. Wall Street was expecting $99.2 million.

THE ANALYSIS: The company blamed short-term factors for the shortfall, and said the long-term outlook for organic light-emitting diodes, or OLEDs, remains strong. They've been incorporated in some smartphone displays, and Japanese and South Korean manufacturers are working toward making ultra-slim TV sets using the technology.

Analysts generally agreed that the long-term story was intact, but Craig Irwin at Wedbush said that the magnitude of the miss meant that "investors will have a considerable amount of skepticism around UDC's revenue forecasts until a more credible record is established." He downgraded the stock from "Outperform" to "Neutral," and cut his price target on the shares from $56 to $20.

SHARE ACTION: UDC shares fell $5.03, or 18 percent, to $23.15 in afternoon trading. In early trading, the shares hit $21.55, the lowest level since 2010.

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