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Today’s Research Reports on Stocks to Watch: Universal Display and Lumentum

NEW YORK, NY / ACCESSWIRE / November 13, 2018 / Universal Display Corp. and Lumentum were big decliners in Monday’s session on news that Lumentum cut its guidance after a large customer reduced its order with the company.

MER Initiates Coverage on:

Universal Display Corporation

Lumentum Holdings Inc.

Universal Display Corporation shares closed down about 13% yesterday on around 2.7 million shares traded. There was no news from the company that could warrant the drop but it was on Monday that Lumentum, a facial recognition component supplier, announced that it was slashing its second quarter guidance due to a reduced shipment request from a large customer, presumed to be Apple. Universal Display Corp. also reduced its own full-year guidance not long ago and said that 2019 is expected to be "a meaningful year of growth" and that the "magnitude of the second half [2018] pick up" in OLED material sales wasn't happening as fast as they expected. The company reported third quarter results earlier this month with CEO Steven V. Abramson saying on the earnings call, "Our third quarter 2018 revenues were $77.6 million, operating profit was $26 million, and net income was $22.8 million or $0.48 per diluted share. Under ASC 605, a prior accounting standard, our third quarter results would have been $91.6 million in revenues, $40.1 million in operating profit and $34.2 million in net income or $0.72 per diluted share."

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Lumentum Holdings Inc. shares closed down nearly 33% on Monday with almost 17.8 million shares traded. The stock hit a new 52-week low of $37.32 after the optical devices maker slashed its guidance for the second quarter by about 17% and its profit guidance by about 25%. The reason for the slash was due to a customer cutting orders, which Wall Street presumed could be Apple. While Lumentum didn't disclose the name of the customer, it along with Finisar and II-VI are supposed suppliers of 3D sensor devices to the iPhone maker. For the second quarter, Lumentum has guided for revenue in the range of $335 million to $355 million. Previously the guidance was a range of $405 million to $430 million. The company now expects earnings per share in the range of $1.15 to $1.34. Previously this range was $1.60 to $1.75. "We recently received a request from one of our largest industrial and consumer customers for laser diodes for 3D sensing to materially reduce shipments during out fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," said the company.

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Our Actionable Research on Universal Display Corporation (NASDAQ: OLED) and Lumentum Holdings Inc. (NASDAQ: LITE) can be downloaded free of charge at MarketEdge Report.

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SOURCE: MarketEdgeReport