Universal Display Corporation OLED reported healthy fourth-quarter 2024 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate. The company reported a year-over-year top-line expansion, backed by solid growth in material sales.
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Growing OLED proliferation in the consumer electronics market is driving growth. Management is undertaking several measures to improve operational and strategic infrastructure to bolster its leadership position in the industry.
Net Income of OLED
Net income in the fourth quarter was $46 million or 96 cents per share compared with $62 million or $1.29 in the year-ago quarter. Higher operating expenses, restructuring charges and foreign exchange headwinds affected the net income. Adjusted earnings were reported at $1.22 per share, which beat the Zacks Consensus Estimate of $1.07.
In 2024, the company reported a net income of $222.1 million or $4.65 per share compared with $203 million or $4.24 in 2023.
Universal Display Corporation Price, Consensus and EPS Surprise
Universal Display Corporation price-consensus-eps-surprise-chart | Universal Display Corporation Quote
Revenues of OLED
The company generated $162.3 million in revenues, up from $158.3 million in the year-ago quarter. Higher material sales boosted the top line. The top line beat the consensus estimate of $149 million.
In 2024, the company generated $647.7 million in revenues, up from $576.4 million in 2023.
Material sales contributed $93.3 million to revenues compared with $82.2 million in the prior-year quarter. The top line beat our estimate of $81.4 million. Revenues from green emitter sales increased to $67 million from $63 million in the year-ago quarter, whereas the same from red emitter sales rose to $25 million from $18 million in the year-ago quarter.
Revenues from Royalty and license fees were $64 million, down from $72.9 million in the year-ago quarter. The top line beat our estimate of $61 million.
Revenues from Contract research services were $4.6 million compared with $3.2 million in the prior-year quarter. The segment’s revenues missed our estimate of $5.7 million.
Other Details of OLED
Quarterly gross profit increased to $124.9 million from $122.3 million in the prior-year quarter. The gross margin was 77% matching the prior-year quarter’s figure. Operating income was $52.5 million and the margin was 32% compared with the year-ago quarter’s $64.7 million and 41%, respectively.
OLED’s Cash Flow & Liquidity
In 2024, Universal Display generated $253.7 million in cash from operating activities compared with $154.77 million in the year-ago period. As of Dec. 31, 2024, the company had $99 million in cash and cash equivalents and $54.5 million in retirement plan benefit liability compared with respective figures of $92 million and $52.2 million in 2023.
OLED’s Guidance Down
For 2025, the company expects revenues of $640-$700 million. The gross margin is predicted at 76-77%. The operating margin is expected at 35-40%.
Management expects the IT market to be the key growth driver in the near term. Expanding markets like automotive and consumer electronics (including OLED AR/VR devices, smartwatches, smartphones and TVs) will drive growth in the upcoming years.
OLED’s Zacks Rank & Stocks to Consider
Universal Display currently has a Zacks Rank #3 (Hold).
Keysight Technologies, Inc. KEYS has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.
InterDigital IDCC sports a Zacks Rank #1 at present. In the trailing four quarters, it delivered an earnings surprise of 158.41%.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.
Akamai Technologies, Inc. AKAM carries a Zacks Rank #2 at present. AKAM delivered an earnings surprise of 3.42%, on average, in the trailing four quarters. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Its offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
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