Oppenheimer analyst, Andrew Uerkwitz, maintained his Perform rating on Universal Display (NASDAQ: OLED) as revenues dropped 5% Y/Y, with 22% royalty/license fee growth offset by a 9% decline in material sales. Green emitter sales were up 25% Q/Q due to sales of yellow green emitters and red emitter were down 45% Q/Q. Host material sales were minimal, which helped to boost material gross margin from 71% to 79%.

Overall, OLED reported 1Q16 revenues/non-GAAP EPS of $29.7M/$0.04 vs. consensus estimates of $30.9M/($0.01). Gross margin surprised to the upside due to mix of fewer host material sales. The company reiterated its FY16 revenue target. The analyst expects the supply chain to be flushed with positive development of OLED throughout 2016 but real financial impact is unlikely to arrive until 2H17.

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Shares of Universal Display closed at $56.25 yesterday.