Back to top

Image: Bigstock

Universal Display (OLED) Q3 Earnings Miss, Revenues Up Y/Y

Read MoreHide Full Article

Universal Display's (OLED - Free Report) third-quarter 2021 earnings of 97 cents per share missed the Zacks Consensus Estimate by 11.01% but increased 14.1% year over year.

The increase can be attributed to robust top-line growth, driven by strong demand for OLED products. Revenues increased 22.7% year over year to $143.6 million but lagged the Zacks Consensus Estimate by 2.73%.

Segment Details

Material sales (52.6% of total revenues) increased 10% year over year to $75.6 million. Green emitters sales (including yellow-green emitters) were $57.8 million, up 9.3% year over year. Red emitter sales were $17.7 million, up 16.4% year over year.

Royalty and license fees (44.5% of total revenues) surged 43.5% year over year to $63.9 million, driven by higher customer sales of royalty-bearing OLED licensed products.
 

 

Contract research services revenues (2.8% of total revenues) were $4.1 million, up 6.5% year over year.

Gross margin in the quarter under review came in at 78.1%, which contracted 200 basis points (bps) year over year. Material gross margin contracted 800 bps on a year-over-year basis to 62%.

Operating expenses of $54.4 million climbed 20.2% year over year. As a percentage of revenues, operating expenses declined 80 bps on a year-over-year basis to 37.9%.

Universal Display reported operating income of $57.7 million, up 19.2% year over year.

Balance Sheet

As of Sep 30, 2021, Universal Display had cash and cash equivalents (including short-term investments) of $789 million compared with of $733.5 million as of Jun 30, 2021.

The company also announced quarterly cash dividend of 20 cents per share, to be paid out on Dec 30, 2021 to all shareholders of record on Dec 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 million, suggesting 29% growth from the figure reported in 2020.

Zacks Rank & Stocks to Consider

Universal Display currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader technology sector include Applied Materials (AMAT - Free Report) , Cisco Systems (CSCO - Free Report) and Clearfield (CLFD - Free Report) . While Clearfield sports a Zacks Rank #1 (Strong Buy), both Applied Materials and Cisco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield and Cisco are set to report their earnings results on Nov 4 and 17, respectively. Applied Material is likely to report the same on Nov 11.

Published in