Universal Display (OLED) reported its second quarter results today after the bell. The company’s shares surged nearly 9% in the extended period of trading due to solid earnings which topped analysts’ estimates.
Revenue plunged 45% in the quarter to $56.1 million due to weaker demand for OLED panels and change in accounting standards. Last year, the company received $45 million as license revenue from Samsung Display which also impacted recently concluded second quarter revenues.
It’s worth noting that Samsung Display (SDC), which accounted for 62% of Universal’s revenues in 2017, is a key customer along with LG Display. Any impact in demand for its OLED products from Samsung will have a ripple effect on Universal’s top and bottom line.
Adjusted earnings came in at $0.31 per share beating street consensus. The company’s board has declared a dividend of $0.06 per share compared to $0.03 per share declared last year.
Material sales business, which brings in lion’s share of revenues, saw 21% decrease in revenues due to softer demand for OLED panels from premium smartphone makers due to weak demand for high-end phones in the market. License revenues dropped 71% to $15.5 million due to the reduction in royalty revenues for licensed products from customers and change in accounting standards.
The OLED display maker has retained its outlook for 2018. Revenue is expected to come in the range of $280 million to $310 million due to softer demand for its products from the key customers. The company saw its stock price fell nearly 42% in 2018 and about 13% in the last 12 months.