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Universal Display (OLED) Up 6.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Universal Display Corp. (OLED - Free Report) . Shares have added about 6.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Universal Display due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Universal Display Q1 Earnings Surpass Estimates, Up Y/Y
Universal Display Corporation 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. 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.
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.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted -26.73% due to these changes.
VGM Scores
Currently, Universal Display has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Universal Display has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Universal Display (OLED) Up 6.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Universal Display Corp. (OLED - Free Report) . Shares have added about 6.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Universal Display due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Universal Display Q1 Earnings Surpass Estimates, Up Y/Y
Universal Display Corporation 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. 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.
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.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted -26.73% due to these changes.
VGM Scores
Currently, Universal Display has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Universal Display has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.