Universal Display (PANL) Shares Drop on Q1 Miss, But Wall Street Not Convinced

Shares of Universal Display Corp. (Nasdaq: PANL) are slumping Thursday following the company's first-quarter miss which was issued after the market Wednesday. The stock moved to as low as $34.08 earlier, down about 13 percent.

The company reported a first-quarter 2012 loss of 3 cents per share on revenue of $12.6 billion; the Street was looking for profit of 5 cents per share on revenue of $16.44 million.

Analysts chimed in on the results:

• Goldman Sachs reaffirmed expectations for 2012 amid the lighter-than-expected revenue. The firm noted Samsung licensing revenue for the year is expected to be $30, just about the midpoint of Street expectations, but below Goldman's views. On the lower Samsung payments, Goldman trimmed EPS estimates by 10 percent for FY12-14 to $0.84, $2.54, and $2.81, respectively.
  
  The firm said it would be buyers on any weakness due to a tendency by Universal Panel investors to overreact to near-term catalysts.
  
  
• Gabelli also disagrees with the market reaction. Though material sales fell about $0.3 million from the fourth quarter, that quarter is traditionally the strongest of the year. Gabelli noted material sales rose 132 percent from the same period last year.
  
  Other growth drivers include better than 100 percent growth at Samsung in AMOLED through further adoption of smartphones as well as OLED TVs and tablets. Over 60 percent growth with LG for its 55-inch OLED TV. Nippon Steel contributions should improve 40 percent with further adoption of green emitter and host materials.
  
  
• KeyBanc commented: "1Q results were worse than Street expectations, as previewed last week, largely due to the timing of licensing fees from Samsung Mobile Display (SMD) (one-fourth of the sell side analysts were not properly modeling the timing of licensing payments) and green phosphorescent materials. Since our preview, we are more constructive about the rate of OLED adoption and licensing sales from SMD, but slightly more cautious about the timing of green emitter / host sales."
  
  The firm also noted Universal has short-term contracts with LG Display (NYSE: LPL) and AU Optronics (NYSE: AUO) (as noted with Gabelli). Both plan on OLED product releases in 2012.
  
  On blue materials, the firm commented: "We believe that Universal Display is well positioned to displace fluorescent blue materials with phosphorescent blue materials in the near to mid term. We believe the solution may be more of a broad-based solution sale (RGB) vs. standalone sale. That said, either would materially increase Universal Display’s total available market."
  
  
• Piper Jaffray made a bearish case on at least one segment: green emitters. The firm said, "emitter sales for Q1’12 were 81% of total with a majority coming from Red while the company indicated a slowdown in its green emitter. As PANL goes through the green emitter qualification, we see Samsung open to either qualifying fluorescence emitters or another vendor for the green. It also implies that competition is much more intense than expected. In such a scenario, we think PANL likely comes in at the low end of its CY12 guidance of $90-110m which it reiterated."

Universal Display shares are down just under 11 percent in mid-day trading.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• KeyBanc Reiterates Overweight Rating on NerdWallet Inc (NRDS)
• Oppenheimer Reiterates Outperform Rating on Verizon Communications (VZ)
• KeyBanc Reiterates Overweight Rating on Pentair (PNR)