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Universal Display (OLED) Q1 Earnings Beat Estimates, Up Y/Y
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Universal Display Corporation (OLED - Free Report) reported first-quarter 2020 adjusted earnings of 80 cents per share (per ASC Topic 606 basis), which improved 40% year over year and beat the Zacks Consensus Estimate by 17.7%.
Revenues surged 27.9% year over year to $112.3 million and also outpaced the Zacks Consensus Estimate by 9%. Revenues include full recognition of safety stock worth $24 million purchased in the fourth quarter by a China-based customer due to trade-related concerns as well as some estimated advanced customer material purchases due to COVID-19 related uncertainties.
Notably, shares have declined 7.3% in the past year compared with the industry’s fall of 16%.
Universal Display Corporation Price, Consensus and EPS Surprise
Material sales (59.3% of total revenues) rallied 22.2% from the year-ago quarter’s figure to $66.6 million. Green emitters sales (including yellow-green emitters) were $52.6 million, up 26.4% year over year. Red emitter sales were $13.9 million, up 8.6% year over year.
Royalty and license fees (38.4% of total revenues) increased 42.2% year over year to $43.1 million. Adesis revenues came in at $2.6 million during the reported quarter compared with $3 million reported in the year-ago quarter.
Contract research services revenues (2.3% of total revenues) came in at $2.6 million, down 12.5% year over year.
Operating Details
Gross margin in the quarter under review came in at 80%, which contracted 200 basis points (bps) from the year-ago quarter’s figure. Material gross margin contracted 600 bps year over year to 70%.
Operating expenses of $45.3 million were up 20.5% year over year. As a percentage of revenues, operating expenses contracted 240 bps on a year-over-year basis to 40.4%.
Consequently, operating margin expanded 400 bps year over year to 39.6%.
Balance Sheet
As of Mar 31, 2020, Universal Display had cash and cash equivalents (including short-term investments) of $639.8 million compared with of $646 million as of Dec 31, 2019.
Cash flow from operating activities was $5.7 million compared with $193.9 million in the prior quarter.
The company recently approved a quarterly cash dividend of 15 cents per share, to be paid out on Jun 30, to its shareholders of record on June 15.
Guidance
The company has withdrawn its guidance for 2020 due to COVID-19 related uncertainties prevailing in the market.
Zacks Rank & Stocks to Consider
Currently, Universal Display carries a Zacks Rank #2 (Buy).
Long-term earnings growth rate for NeoPhotonics and InterDigital is pegged at 15% each, while the same for Cogent is at 11.46%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Universal Display (OLED) Q1 Earnings Beat Estimates, Up Y/Y
Universal Display Corporation (OLED - Free Report) reported first-quarter 2020 adjusted earnings of 80 cents per share (per ASC Topic 606 basis), which improved 40% year over year and beat the Zacks Consensus Estimate by 17.7%.
Revenues surged 27.9% year over year to $112.3 million and also outpaced the Zacks Consensus Estimate by 9%. Revenues include full recognition of safety stock worth $24 million purchased in the fourth quarter by a China-based customer due to trade-related concerns as well as some estimated advanced customer material purchases due to COVID-19 related uncertainties.
Notably, shares have declined 7.3% in the past year compared with the industry’s fall of 16%.
Universal Display Corporation Price, Consensus and EPS Surprise
Universal Display Corporation price-consensus-eps-surprise-chart | Universal Display Corporation Quote
Segment Details
Material sales (59.3% of total revenues) rallied 22.2% from the year-ago quarter’s figure to $66.6 million. Green emitters sales (including yellow-green emitters) were $52.6 million, up 26.4% year over year. Red emitter sales were $13.9 million, up 8.6% year over year.
Royalty and license fees (38.4% of total revenues) increased 42.2% year over year to $43.1 million. Adesis revenues came in at $2.6 million during the reported quarter compared with $3 million reported in the year-ago quarter.
Contract research services revenues (2.3% of total revenues) came in at $2.6 million, down 12.5% year over year.
Operating Details
Gross margin in the quarter under review came in at 80%, which contracted 200 basis points (bps) from the year-ago quarter’s figure. Material gross margin contracted 600 bps year over year to 70%.
Operating expenses of $45.3 million were up 20.5% year over year. As a percentage of revenues, operating expenses contracted 240 bps on a year-over-year basis to 40.4%.
Consequently, operating margin expanded 400 bps year over year to 39.6%.
Balance Sheet
As of Mar 31, 2020, Universal Display had cash and cash equivalents (including short-term investments) of $639.8 million compared with of $646 million as of Dec 31, 2019.
Cash flow from operating activities was $5.7 million compared with $193.9 million in the prior quarter.
The company recently approved a quarterly cash dividend of 15 cents per share, to be paid out on Jun 30, to its shareholders of record on June 15.
Guidance
The company has withdrawn its guidance for 2020 due to COVID-19 related uncertainties prevailing in the market.
Zacks Rank & Stocks to Consider
Currently, Universal Display carries a Zacks Rank #2 (Buy).
Cogent Communications Holdings, Inc. (CCOI - Free Report) , NeoPhotonics Corporation and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for NeoPhotonics and InterDigital is pegged at 15% each, while the same for Cogent is at 11.46%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>