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Universal Display (OLED) Q1 Earnings & Revenues Top Estimates
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Universal Display's (OLED - Free Report) first-quarter 2021 earnings improved 35% year over year to $1.08 per share and topped the Zacks Consensus Estimate by 61.19%.
The increase can be attributed to growth in revenue base. Revenues increased 19.3% year over year to $134 million and beat the Zacks Consensus Estimate by 17.09%.
Universal Display Corporation Price, Consensus and EPS Surprise
Material sales (59.6% of total revenues) climbed 19.9% from the year-ago quarter’s figure to $79.8 million. Green emitters sales (including yellow-green emitters) were $60.5 million, up 15% year over year. Red emitter sales were $19.1 million, up 37.4% year over year.
Royalty and license fees (37.9% of total revenues) surged 18.1% year over year to $50.9 million driven by higher customer sales of royalty-bearing OLED licensed products.
Adesis revenues amounted to $3.3 million during the reported quarter compared with $2.6 million in the year-ago quarter.
Contract research services revenues (2.5% of total revenues) were $3.3 million, up 26% year over year.
Operating Details
Gross margin in the quarter under review came in at 82.6%, which expanded 260 basis points (bps) from the year-ago quarter’s figure. Material gross margin expanded 400 bps on a year-over-year basis to 74%.
Operating expenses of $48.8 million climbed 4% year over year. As a percentage of revenues, operating expenses contracted 520 bps on a year-over-year basis to 35.2%.
The company reported operating income of $63.6 million, up 42.8% on a year-over-year basis. Moreover, operating margin expanded 780 bps on a year-over-year basis to 74%. This can be attributed to gross margin expansion and lower operating expenses.
Balance Sheet & Cash Flow
As of Mar 31, 2021, Universal Display had cash and cash equivalents (including short-term investments) of $727 million compared with of $730 million as of Dec 31, 2020.
During the reported quarter, cash flow from operations was $29.5 million compared with $5.7 million in first-quarter 2020.
On May 6, 2021, the company announced quarterly cash dividend of 20 cents per share, to be paid out on Jun 30, 2021 to all shareholders of record on Jun 15, 2021.
Guidance
Universal Display maintained 2021 outlook. The company continues to project 2021 revenues in the range of $530 million to $560 million. The Zacks Consensus Estimate is currently pegged at $551.14 million.
Moreover, the company continues to expect 2021 material gross margins in the 65-70% range. Operating margins are 2021 are anticipated in the 40-45% range.
Research & development (R&D) expenses are projected to be up nearly 25% and Selling, general and administrative (SG&A) expenses are anticipated to be up nearly 15% for 2021. Overall, operating expenses (SG&A, R&D and patent costs) are expected to increase in the range of 20-25% on a year-over-year basis.
Markedly, Universal Display’s products are widely used by OEMs in the consumer electronics markets like Apple, Samsung, Lenovo and LG. In 2020, the company also announced its collaboration with China Star Optoelectronics and set up OVJP Corporation to further commercialization of OLED TV manufacturing technology.
Zacks Rank & Stocks to Consider
Currently, Universal Display carries a Zacks Rank #3 (Hold).
Agilent scheduled to report quarterly results on May 25, while NVIDIA and Pure Storage are slated to announce results on May 26.
Long-term earnings growth rate of Pure Storage, NVIDIA and Agilent, is pegged at 52.21%, 15.05% and 9%, respectively.
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Universal Display (OLED) Q1 Earnings & Revenues Top Estimates
Universal Display's (OLED - Free Report) first-quarter 2021 earnings improved 35% year over year to $1.08 per share and topped the Zacks Consensus Estimate by 61.19%.
The increase can be attributed to growth in revenue base. Revenues increased 19.3% year over year to $134 million and beat the Zacks Consensus Estimate by 17.09%.
Universal Display Corporation Price, Consensus and EPS Surprise
Universal Display Corporation price-consensus-eps-surprise-chart | Universal Display Corporation Quote
Segment Details
Material sales (59.6% of total revenues) climbed 19.9% from the year-ago quarter’s figure to $79.8 million. Green emitters sales (including yellow-green emitters) were $60.5 million, up 15% year over year. Red emitter sales were $19.1 million, up 37.4% year over year.
Royalty and license fees (37.9% of total revenues) surged 18.1% year over year to $50.9 million driven by higher customer sales of royalty-bearing OLED licensed products.
Adesis revenues amounted to $3.3 million during the reported quarter compared with $2.6 million in the year-ago quarter.
Contract research services revenues (2.5% of total revenues) were $3.3 million, up 26% year over year.
Operating Details
Gross margin in the quarter under review came in at 82.6%, which expanded 260 basis points (bps) from the year-ago quarter’s figure. Material gross margin expanded 400 bps on a year-over-year basis to 74%.
Operating expenses of $48.8 million climbed 4% year over year. As a percentage of revenues, operating expenses contracted 520 bps on a year-over-year basis to 35.2%.
The company reported operating income of $63.6 million, up 42.8% on a year-over-year basis. Moreover, operating margin expanded 780 bps on a year-over-year basis to 74%. This can be attributed to gross margin expansion and lower operating expenses.
Balance Sheet & Cash Flow
As of Mar 31, 2021, Universal Display had cash and cash equivalents (including short-term investments) of $727 million compared with of $730 million as of Dec 31, 2020.
During the reported quarter, cash flow from operations was $29.5 million compared with $5.7 million in first-quarter 2020.
On May 6, 2021, the company announced quarterly cash dividend of 20 cents per share, to be paid out on Jun 30, 2021 to all shareholders of record on Jun 15, 2021.
Guidance
Universal Display maintained 2021 outlook. The company continues to project 2021 revenues in the range of $530 million to $560 million. The Zacks Consensus Estimate is currently pegged at $551.14 million.
Moreover, the company continues to expect 2021 material gross margins in the 65-70% range. Operating margins are 2021 are anticipated in the 40-45% range.
Research & development (R&D) expenses are projected to be up nearly 25% and Selling, general and administrative (SG&A) expenses are anticipated to be up nearly 15% for 2021. Overall, operating expenses (SG&A, R&D and patent costs) are expected to increase in the range of 20-25% on a year-over-year basis.
Markedly, Universal Display’s products are widely used by OEMs in the consumer electronics markets like Apple, Samsung, Lenovo and LG. In 2020, the company also announced its collaboration with China Star Optoelectronics and set up OVJP Corporation to further commercialization of OLED TV manufacturing technology.
Zacks Rank & Stocks to Consider
Currently, Universal Display carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector worth consideration are Agilent Technologies (A - Free Report) , Pure Storage (PSTG - Free Report) and NVIDIA (NVDA - Free Report) . All the stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Agilent scheduled to report quarterly results on May 25, while NVIDIA and Pure Storage are slated to announce results on May 26.
Long-term earnings growth rate of Pure Storage, NVIDIA and Agilent, is pegged at 52.21%, 15.05% and 9%, respectively.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>