Universal Display's Q3 Results Send Stock Into Tailspin
Shares of small-cap organic light emitting diode (OLED) manufacturer Universal Display Corporation (NASDAQ: PANL) lost around 43 percent of their value on Wednesday. At the open of trading on Thursday, the company, which had a market cap of $1.31 billion at Wednesday's close, will be firmly in small-cap territory. The stock, which has been extremely volatile in recent years, plunged 12 percent during regular trading hours to $28.18.
That, however, was just a warm-up. After the closing bell, PANL released its fiscal third quarter earnings results. The stock was halted for the earnings release, but upon re-opening in the after-hours, shares promptly nosedived another 31 percent. Shares were trading at $19.45 after opening on Wednesday morning at $31.80. That is not a good day, and certainly management, employees, and PANL shareholders would rather that Wednesday never happened.
If the stock opens below $20.00 on Thursday, it would be the lowest price for PANL since September 2010. Universal Display's third quarter results were rather terrible and the company also slashed its full-year outlook. The company said that it lost $0.12 per share for the third quarter which was way below analysts' consensus estimates calling for a profit of $0.05 per share. Sales for the period were also extremely poor.
Universal Display reported that revenues fell to $12.5 million versus $21.8 million in last year's third quarter. This was well below Wall Street revenue expectations of $18.9 million. Looking ahead, the company dramatically lowered its full-year revenue outlook to a range of $80 million to $82 million compared to its previous forecast of $90 million to $110 million. Prior to the updated guidance, analysts were modeling full-year sales of $99.8 million.
In the wake of the awful results and guidance, Universal Display's Sidney Rosenblatt tried to strike an upbeat tone, while acknowledging the disappointment.
He said, "The long-term outlook for OLED technology remains strong, despite this quarter's results." Rosenblatt elaborated on the results by saying “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.”
Despite management's best efforts to put a positive spin on the steep drop in third-quarter sales, the company's operating loss, and slashed full-year outlook, expect for PANL to take a swan dive at tomorrow's open.
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