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Universal Display (OLED) Q1 Earnings Beat on High Material Sales
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Universal Display Corporation (OLED - Free Report) reported strong first-quarter 2024 results, with both the bottom and top lines surpassing the respective Zacks Consensus Estimate. The company reported a top-line expansion year over year, backed by solid demand for emitter materials and improvement in royalty and license fees. The company is witnessing strong OLED proliferation in smartphones and TVs. The growing usage of OLED displays among major device makers such as Samsung and Panasonic is a tailwind.
Net Income
Net income in the first quarter was $56.9 million or $1.19 per share compared with $39.8 million or 83 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 14 cents. The improvement was primarily attributed to net sales growth year over year.
Universal Display Corporation Price, Consensus and EPS Surprise
The company generated $165.3 million in revenues, up from $130.5 million in the year-ago quarter. Growing revenues from Material sales and higher Royalty and license fees boosted top-line. The top line beat the consensus estimate by $19 million.
Material sales contributed $93.3 million to revenues compared to $70.2 million in the prior year quarter. The uptick was driven by healthy demand for emitter materials. The top line beat our estimate of $82.6 million. Green emitter sales increased to $71 million from $54 million in the year-ago quarter, while sales of red emitter rose to $21 million from $16 million in the year-ago quarter.
Revenues from Royalty and license fees were $68.3 million, up from $55.2 million in the prior-year quarter, mainly due to higher unit material volume. The top line beat our estimate of $59.5 million.
Revenues from Contract research services were $3.7 million compared with $5.1 million in the prior-year quarter. The segment’s revenues marginally surpassed our estimate of $3.6 million.
Other Details
Quarterly gross profit increased to $128.3 million from $97.5 million in the prior-year quarter, with respective margins of 78% and 75%. Despite the higher cost of material sales, top-line growth supported the gross margin.
Operating income stood at $62.9 million and the margin was 38% compared with the year-ago quarter’s figures of $45.4 million and 35%, respectively.
Cash Flow & Liquidity
In 2024, Universal Display generated $72.2 million in cash from operating activities compared with $47.6 million in the year-ago quarter. As of Mar 31, 2024, the company had $74 million in cash and cash equivalents and $52.6 million in retirement plan benefit liability.
Guidance Up
Backed by solid momentum in multiple end markets, management has raised the lower end of its revenue guidance for 2024. The company currently expects revenue in the range of $635-675 million, up from $625-675 million estimated earlier.
Looking ahead, the company is poised to benefit from OLED IT product launches by several manufacturers in the upcoming quarters. Emerging markets of foldable smartphones, electric vehicles, and AR and VR wearables boast a significant growth opportunity.
The company is making steady progress in the development of a commercial phosphorescent blue emissive system. It is planning to launch the phosphorescent blue in 2024. Management believes that expanding its phosphorescent portfolio that includes red, green and blue phosphorescent emissive materials will open up ample opportunities across a broad range of OLED applications.
Zacks Rank & Stocks to Consider
Universal Display currently carries a Zacks Rank #3 (Hold).
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Qualcomm Incorporated (QCOM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 7.54%. In the last reported quarter, it delivered an earnings surprise of 6.09%.
Qualcomm Incorporated designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The products include CDMA-based integrated circuits and system software for wireless voice and data communications, as well as global positioning system products.
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Universal Display (OLED) Q1 Earnings Beat on High Material Sales
Universal Display Corporation (OLED - Free Report) reported strong first-quarter 2024 results, with both the bottom and top lines surpassing the respective Zacks Consensus Estimate. The company reported a top-line expansion year over year, backed by solid demand for emitter materials and improvement in royalty and license fees. The company is witnessing strong OLED proliferation in smartphones and TVs. The growing usage of OLED displays among major device makers such as Samsung and Panasonic is a tailwind.
Net Income
Net income in the first quarter was $56.9 million or $1.19 per share compared with $39.8 million or 83 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 14 cents. The improvement was primarily attributed to net sales growth year over year.
Universal Display Corporation Price, Consensus and EPS Surprise
Universal Display Corporation price-consensus-eps-surprise-chart | Universal Display Corporation Quote
Revenues
The company generated $165.3 million in revenues, up from $130.5 million in the year-ago quarter. Growing revenues from Material sales and higher Royalty and license fees boosted top-line. The top line beat the consensus estimate by $19 million.
Material sales contributed $93.3 million to revenues compared to $70.2 million in the prior year quarter. The uptick was driven by healthy demand for emitter materials. The top line beat our estimate of $82.6 million. Green emitter sales increased to $71 million from $54 million in the year-ago quarter, while sales of red emitter rose to $21 million from $16 million in the year-ago quarter.
Revenues from Royalty and license fees were $68.3 million, up from $55.2 million in the prior-year quarter, mainly due to higher unit material volume. The top line beat our estimate of $59.5 million.
Revenues from Contract research services were $3.7 million compared with $5.1 million in the prior-year quarter. The segment’s revenues marginally surpassed our estimate of $3.6 million.
Other Details
Quarterly gross profit increased to $128.3 million from $97.5 million in the prior-year quarter, with respective margins of 78% and 75%. Despite the higher cost of material sales, top-line growth supported the gross margin.
Operating income stood at $62.9 million and the margin was 38% compared with the year-ago quarter’s figures of $45.4 million and 35%, respectively.
Cash Flow & Liquidity
In 2024, Universal Display generated $72.2 million in cash from operating activities compared with $47.6 million in the year-ago quarter. As of Mar 31, 2024, the company had $74 million in cash and cash equivalents and $52.6 million in retirement plan benefit liability.
Guidance Up
Backed by solid momentum in multiple end markets, management has raised the lower end of its revenue guidance for 2024. The company currently expects revenue in the range of $635-675 million, up from $625-675 million estimated earlier.
Looking ahead, the company is poised to benefit from OLED IT product launches by several manufacturers in the upcoming quarters. Emerging markets of foldable smartphones, electric vehicles, and AR and VR wearables boast a significant growth opportunity.
The company is making steady progress in the development of a commercial phosphorescent blue emissive system. It is planning to launch the phosphorescent blue in 2024. Management believes that expanding its phosphorescent portfolio that includes red, green and blue phosphorescent emissive materials will open up ample opportunities across a broad range of OLED applications.
Zacks Rank & Stocks to Consider
Universal Display currently carries a Zacks Rank #3 (Hold).
Pinterest (PINS - Free Report) , carrying a Zacks Rank #2 (Buy) at present, delivered a trailing four-quarter average earnings surprise of 38.78%. In the last reported quarter, it delivered an earnings surprise of 42.86%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Qualcomm Incorporated (QCOM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 7.54%. In the last reported quarter, it delivered an earnings surprise of 6.09%.
Qualcomm Incorporated designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The products include CDMA-based integrated circuits and system software for wireless voice and data communications, as well as global positioning system products.