Shares of Universal Display Corp. OLED, -2.07% are off 5% in morning trading Friday after the maker of display technologies reported lower-than-expected results for its most recent quarter and reiterated a full-year forecast that some analysts said hinted at near-term challenges.
In its Thursday afternoon earnings report, the company reported net income of $46.1 million, or 97 cents a share, up from $40.5 million, or 85 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting $1.07 a share. Universal Display saw revenue grow to $143.6 million from $117.1 million, whereas analysts were anticipating $145.3 million. For the full year, Universal Display expects $530 million to $560 million in revenue. The FactSet consensus was for $556.7 million as late October. Chief Financial Officer Sidney Rosenblatt said on the company’s earnings call that “you’ve heard from other companies in the consumer electronic ecosystem, the pandemic and component shortages have impacted output, and therefore, it’s going to affect everybody in the food chain, including us.” Following the report, Oppenheimer analyst Martin Yang wrote that the “fundamental drivers for OLED remain strong,” but he said he was trimming his forecast to account for “headwinds from near-term chip shortages and [a] weaker-than-expected Android smartphone market recovery.” Evercore ISI’s C.J. Muse said that one risk he sees ahead is that the company’s initial forecast for calendar 2022, when it comes in February, might not match up with the current consensus view, “despite our view that revenues will exceed this forecast when all is said and done.” Shares of Universal Display have declined 24% over the past three months as the S&P 500 SPX, 0.61% has risen 6%.