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Last Update: 08-Nov-12 08:46 ET
Universal Display shares plunge 26% following miss on earnings
Universal Display (PANL $20.83 -7.35) reported third quarter loss of $0.12 per share, $0.17 worse than the Capital IQ consensus of $0.05, while revenues fell 42.7% year/year to $12.5 million versus the $19.2 mln consensus. Results for the third quarter of 2012 do not include the recognition of any revenue under a licensing agreement with Samsung Display Co. Ltd. (SDC), under which SDC is obligated to make payments to the Company of $15 million in each of the second and fourth quarters of this year. Had the Company recognized these payments on a pro rata quarterly basis over the year, it would have resulted in an additional $7.5 million of royalty and license fees revenue in the third quarter. The SDC licensing revenue is subject to a royalty fee of 3% payable to the Company's university partners, and 16.5% in South Korean taxes. "Material sales in the quarter were consistent with the first quarter of the year, reflecting what we believe to be a temporary slowdown in industry growth. We believe that a more indicative measure of our continued strong growth and the outlook for OLED technology is the 29 percent growth in year-over-year revenues over the first three quarters of the year despite having only received half of the year's Samsung licensing revenue." The company issued downside guidance for FY12, lowered fiscal year 2012 revenues of $80-82 million from $90-110 million versus the $99.84 million consensus -- with the caveat that the OLED industry is in the early stage of development and commercial adoption, where the delay or acceleration in the introduction of a commercial line or products by a small number of customers could have a material impact on the company's rev opportunities.
