Universal Display has announced 2nd quarter 2018 financials results ended June 30, 2018.
Total revenue decreased 37% to US$99.7 million in the first half of 2018, compared with US$158.1 million in the first half of 2017. Total revenue would have been US$141.8 million in the 2018 period, or US$42.1 million higher, without the impact of ASC Topic 606.
Revenue from material sales decreased 34% to US$62.1 million in the first half of 2018, compared with US$93.5 million in the first half of 2017. The Company believes that the decline in material sales was due to weak OLED panel demand resulting from the softness in the premium smartphone market, and material inventory pre-purchases that occurred in 2017.
Revenue from royalty and license fees decreased 48% to US$31.4 million in the first half of 2018, compared with US$60.7 million in the first half of 2017. Revenue from royalty and license fees would have been US$71.0 million in the 2018 period, or US$39.6 million higher without the impact of ASC Topic 606.
Operating income decreased by US$57.2 million to US$15.4 million in the first half of 2018, compared with US$72.6 million in the first half of 2017.
Cost of materials decreased 32% to US$15.0 million in the first half of 2018, compared with US$22.0 million in the first half of 2017.
Net income decreased by US$40.8 million to US$16.8 million or US$0.35 per diluted share in the first half of 2018, compared with US$57.6 million or US$1.21 per diluted share in the first half of 2017.
2018 Guidance
Although the OLED industry is still at an early state where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly, the Company continues to expect that its 2018 revenues will be in the range of US$280 million to US$310 million. The guidance was prepared utilising accounting standard ASC Topic 606; under the prior accounting standard ASC Topic 605, the Company estimates that its 2018 revenues would be approximately 10% to 15% higher than the revenue guidance range.
Dividend
The Company also announced a third quarter cash dividend of US$0.06 per share on the Company’s common stock. The dividend is payable on September 28, 2018 to all shareholders of record on September 15, 2018.
| Universal Display reports financial results for Q2 2018 (US$ ,000) |
2018 Q2 |
2017 Q2 |
2018 H1 |
2017 H1 |
|---|---|---|---|---|
| Revenue - Materials | 36,833 | 46,828 | 62,083 | 93,465 |
| Revenue - Royalty and licences | 15,523 | 53,667 | 31,434 | 60,692 |
| Revenue - Contract research services | 3,793 | 2,018 | 6,204 | 3,922 |
| Total Revenue | 56,149 | 102,513 | 99,721 | 158,079 |
| Operating expenses | 33,603 | 30.684 | 65,198 | 62,205 |
| Net (loss) Income | 10,814 | 47,187 | 16,773 | 57,552 |
| Net result per share - basic($) | 0.23 | 0.99 | 0.35 | 1.21 |
"In the second quarter, we saw material sales improving off what we believed to be a first quarter 'bottom' for material shipments."
"With anticipated new OLED product launches from leading OEMs around the world, we continue to expect an additional pick-up in orders and revenues in the second half of the year. As we look to 2019, we continue to anticipate it to be a meaningful year of growth."
"We believe that 2019 is poised to be a pivotal year for the OLED industry. With the multi-year OLED capex growth cycle of new production lines, the landscape of OLED capacity is expected to significantly widen. This, we believe, will drive broader adoption of OLEDs across the consumer electronics market, and fuel substantial growth in the OLED industry. Additionally, we expect the long-awaited introduction of the world’s first foldable OLED product next year to pave the cutting-edge and innovative form factor path. From conformable, to foldable, to rollable, the disruptive and exciting force of OLEDs promises to enlarge the industry with new applications and new markets the imagination has yet to devise."
Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display