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Universal Display (OLED) Q2 Earnings & Revenues Top Estimates

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·3 min read
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Universal Display's OLED second-quarter 2021 earnings of 85 cents per share beat the Zacks Consensus Estimate by 16.44% and jumped significantly from 2 cents reported in the year-ago quarter.

The increase can be attributed to robust top-line growth, driven by strong demand for OLED products. Revenues surged 123.7% year over year to $129.7 million and beat the Zacks Consensus Estimate by 5.95%.

Segment Details

Material sales (59.7% of total revenues) soared 142.5% year over year to $77.4 million. Green emitters sales (including yellow-green emitters) were $57.8 million, up 138.8% year over year. Red emitter sales were $19.5 million, up 160% year over year.

Royalty and license fees (37.2% of total revenues) surged 115.4% year over year to $48.2 million driven by higher customer sales of royalty-bearing OLED licensed products.

Contract research services revenues (3.1% of total revenues) were $4 million, up 9.5% year over year.

Universal Display Corporation Price, Consensus and EPS Surprise

Universal Display Corporation Price, Consensus and EPS Surprise
Universal Display Corporation Price, Consensus and EPS Surprise

Universal Display Corporation price-consensus-eps-surprise-chart | Universal Display Corporation Quote

Gross margin in the quarter under review came in at 78.4%, which expanded 20 basis points (bps) year over year. Material gross margin contracted 100 bps on a year-over-year basis to 67%.

Operating expenses of $51.8 million climbed 11.4% year over year. As a percentage of revenues, operating expenses declined from the year-ago quarter’s figure of 80.2% to 39.9% in the reported quarter.

Universal Display reported operating income of $49.9 million against the year-ago quarter’s operating loss of $1.2 million.

Balance Sheet

As of Jun 30, 2021, Universal Display had cash and cash equivalents (including short-term investments) of $733.5 million compared with $727 million as of Mar 31, 2021.

The company also announced quarterly cash dividend of 20 cents per share, to be paid out on Sep 30, 2021 to all shareholders of record on Sep 16, 2021.

Guidance

Universal Display maintained its 2021 outlook. The company continues to project 2021 revenues between $530 million and $560 million, indicating revenue growth of 30% year over year. The Zacks Consensus Estimate for revenues is currently pegged at $553.5 million, suggesting 29.1% growth from the figure reported in 2020.

Operating margin for 2021 is still anticipated in the 40-45% range.

Zacks Rank & Stocks to Consider

Universal Display currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Avnet AVT, CyberArk Software CYBR and Agilent Technologies A. While Avnet sports a Zacks Rank #1 (Strong Buy), both CyberArk and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet, CyberArk and Agilent are set to report their earnings results on Aug 11, 12 and 17, respectively.


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