Universal Display(US:OLED)2020-10-30 02:46Financial Data and Key Metrics Changes - The company reported third-quarter 2020 revenues of $117 million, up from $58 million in the second quarter of 2020 and $98 million in the third quarter of 2019 [30] - Operating profit for the third quarter was $48.4 million, compared to an operating loss of $1.2 million in the previous quarter and an operating income of $40.8 million in the same quarter last year [37] - Net income for the third quarter was $40.5 million, or $0.85 per diluted share, compared to $815,000 or $0.02 per diluted share in the previous quarter and $37 million or $0.78 per diluted share in the same quarter last year [38] - The company ended the quarter with $673 million in cash and equivalents, translating to over $14 of cash per diluted share [38] Business Line Data and Key Metrics Changes - Total material sales in the third quarter were $68.7 million, significantly up from $31.9 million in the second quarter and $51.8 million in the third quarter of 2019 [30] - Green emitter sales reached $52.9 million in the third quarter, compared to $24.2 million in the second quarter and $40.2 million in the third quarter of 2019 [31] - Royalty and license fees for the third quarter were $44.6 million, up from $22.4 million in the second quarter and $43 million in the third quarter of 2019 [34] Market Data and Key Metrics Changes - The company noted a significant increase in customer orders starting in July, which continued through August and September, indicating strong demand in the consumer electronics market [9] - The company highlighted the launch of new OLED consumer electronic models, including Apple's iPhone 12 series and Samsung's Galaxy Z Fold 2, which are expected to drive further growth in OLED adoption [11][13] Company Strategy and Development Direction - The company aims to strengthen its position in the OLED ecosystem by expanding customer partnerships, enhancing R&D efforts, and fortifying product development [24] - The focus remains on advancing phosphorescent technology and materials, with ongoing development work for commercial phosphorescent blue emissive systems [25][26] - The company is committed to sustainability, innovation, and continuous improvement, aiming to contribute positively to the industry and communities [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of demand for OLED technology, despite uncertainties related to the COVID-19 pandemic [9] - The company anticipates that 2020 revenues will be in the range of $385 million to $400 million, with expectations for meaningful growth in 2021 as new OLED production comes online [10][38] - Management acknowledged the challenges posed by the pandemic but remains optimistic about the long-term growth potential of the OLED market [61] Other Important Information - The Board of Directors approved a quarterly dividend of $0.15, reflecting the company's commitment to return capital to shareholders [39] - The company is actively involved in educational initiatives to inspire future generations in STEM fields [43][45] Q&A Session Summary Question: Customer breakdown and Huawei embargo impact - Management believes that inventory has been burned through for a large Chinese customer, and the impact of the Huawei issue may not significantly affect the company if overall industry growth remains intact [51] Question: Guidance and revenue trends - Management indicated that the guidance for the fourth quarter reflects various factors including panel production schedules and year-end inventory issues, and they are comfortable with the current guidance [56][74] Question: Developmental materials and gross margins - Management noted that developmental materials are across the board and that gross margins are expected to remain intact as economies of scale kick in once materials move into commercial production [66][68] Question: TV market outlook - Management expressed optimism about the OLED TV market growth, with expectations for pricing to come down as production increases, which will drive further adoption [99][118] Question: OVJP technology development - Management outlined that commercialization of OVJP technology is expected to be three to five years away, with ongoing R&D and equipment design efforts [110]