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Universal Display Q4 Profit Misses View, But Revenues Top; Guides 2013 In Line

2/27/2013 8:06 PM ET

LED technologies company Universal Display Corp. (PANL: Quote) reported Wednesday a profit for the fourth quarter that edged down from last year, reflecting an income tax expense compared to a benefit last year.

Earnings per share missed analysts' expectations by a penny, while quarterly revenues topped their estimates. The company also provided revenue guidance for the full-year 2013, in line with Street view.

"As we continue to grow, we are building a business that we believe can deliver strong gross margins, produce high operating leverage and generate strong cash flow. Our goal is to solidify and extend our market leadership to capitalize on the growth of the OLED market," CFO Sidney Rosenblatt said in a statement.

The Ewing, New Jersey-based company reported net income of $5.39 million for the fourth quarter, lower than $5.73 million in the prior-year quarter. However, earnings per share remained flat with last year at $0.12.

The results for the year-ago quarter included a net tax benefit of about $2.7 million as a result of the sale of state-related net operating losses and tax credits.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter surged 51 percent to $28.13 million from $18.66 million in the same quarter last year, and topped ten Wall Street analysts' consensus estimate of $26.44 million.

Royalty and license fees nearly tripled to $15.4 million from $5.4 million, primarily due to increased revenue under the licensing agreement with Samsung Display Corp. or SDC, and formerly Samsung Mobile Display.

Meanwhile, material sales declined 7 percent to $10.1 million from $10.8 million in the year-ago quarter.

Operating income for the quarter more than doubled to $8.4 million from $3.6 million last year. Total operating expenses increased to $19.76 million from $15.09 million, reflecting higher patent costs and amortization of acquired technology as a result of the Fujifilm patent portfolio acquisition.

The company incurred an income tax expense of $3.24 million, compared to an income tax benefit of $1.84 million last year.

"Over the past year, through the acquisition of OLED patent portfolios, new partnerships with companies both domestically and in South Korea, and the expansion of our facilities, we have been making the investments that we anticipate will enable us to remain at the forefront of an industry that we believe is only now entering the early stages of a period of significant growth," Rosenblatt added.

For fiscal 2012, the company reported net income of $9.66 million or $0.21 per share, higher than $3.16 million or $0.07 per share in the prior year. Revenues for the full year increased 36 percent to $83.24 million from $61.29 million in the previous year.

Analysts expected the company to report full-year 2012 earnings of $0.23 per share on annual earnings of $81.58 million.

Looking ahead to fiscal 2013, the company expects revenues in the range of $110 million to $125 million. Street is currently looking for full-year 2013 revenues of $122.51 million.

PANL closed Wednesday's regular trading session at $27.90, down $0.50 or 1.76% on a volume of 1.48 million shares. However, the stock gained $0.60 or 2.15% in after-hours trading.

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by RTT Staff Writer

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