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Universal Display (OLED) Q1 Earnings & Revenues Top Estimates

Zacks Equity Research

Universal Display Corporation OLED delivered first-quarter 2019 adjusted earnings of 66 cents per share surpassing the Zacks Consensus Estimate of 26 cents.

Revenues increased 101.4% to $87.8 million and outpaced the Zacks Consensus Estimate of $61 million.

The company adopted a new Accounting Standards Codification ("ASC") 606 using full retrospective method from the first quarter of 2018.

Universal Display Corporation Revenue (Quarterly)

 

Universal Display Corporation Revenue (Quarterly) | Universal Display Corporation Quote

Segment Details

Material sales (62.1% of total revenues) increased 115.8% from the year-ago quarter to $54.5 million. Green emitters sales (including yellow-green emitters) were $41.6 million, up 143.3% year over year. Red emitter sales were $12.8 million, up from $8 million reported in the year-ago quarter.

Royalty and license fees (34.5% of total revenues) increased 90.2% year over year to $30.3 million. Adesis revenues came in at $3 million during the reported quarter compared with $2.4 million reported in the year-ago quarter.

Operating Details

Gross margin during the quarter under review came in at 81.9% compared with 82.9% reported in the year-ago quarter. Material gross margin contracted to 76% compared with 77% reported in the year-ago quarter.

Operating expense during the reported quarter came in at $15.8 million compared with $7.5 million reported in the year-ago quarter.

Operating margin came in at 39.2% compared with 10.4% reported in the year-ago quarter.

Balance Sheet

As on Mar 31, 2019, Universal Display had cash and cash equivalents (including short-term investments) of $526.6 million compared with $515.3 million at the end of previous quarter.

The company generated $34 million as cash from operating activities during the reported quarter.

The company recently approved a quarterly cash dividend payment of 10 cents per share to be paid on Jun 28, 2019 to shareholders as on Jun 14, 2019.

Guidance

Universal Display updated guidance for fiscal 2019. The company now anticipates revenues between $345 million and $365 million under ASC 606 (previously $325 million and $350 million). Under ASC 605, the company expects revenues to be in the range of $405 million to $425 million (previously $395 million to $420 million). The Zacks Consensus Estimate for revenues is pegged at $335.1 million.

Zacks Rank & Stocks to Consider

Currently, Universal Display has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Synopsys, Inc. SNPS, Cadence Design Systems, Inc. CDNS and Upland Software, Inc. UPLD, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Synopsys, Cadence Designand Upland Softwarehave a long-term earnings growth rate of 10%, 12% and 20%, respectively.

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