Shares of small-cap organic light emitting diode (OLED)
manufacturer Universal Display Corporation (NASDAQ:
PANL
) lost around 43 percent of their value on Wednesday. At the open
of trading on Thursday, the company, which had a market cap of
$1.31 billion at Wednesday's close, will be firmly in small-cap
territory. The stock, which has been extremely volatile in recent
years, plunged 12 percent during regular trading hours to
$28.18.
That, however, was just a warm-up. After the closing bell,
PANL released its fiscal third quarter earnings results. The
stock was halted for the earnings release, but upon re-opening in
the after-hours, shares promptly nosedived another 31 percent.
Shares were trading at $19.45 after opening on Wednesday morning
at $31.80. That is not a good day, and certainly management,
employees, and PANL shareholders would rather that Wednesday
never happened.
If the stock opens below $20.00 on Thursday, it would be the
lowest price for PANL since September 2010. Universal Display's
third quarter results were rather terrible and the company also
slashed its full-year outlook. The company said that it lost
$0.12 per share for the third quarter which was way below
analysts' consensus estimates calling for a profit of $0.05 per
share. Sales for the period were also extremely poor.
Universal Display reported that revenues fell to $12.5 million
versus $21.8 million in last year's third quarter. This was well
below Wall Street revenue expectations of $18.9 million. Looking
ahead, the company dramatically lowered its full-year revenue
outlook to a range of $80 million to $82 million compared to its
previous forecast of $90 million to $110 million. Prior to the
updated guidance, analysts were modeling full-year sales of $99.8
million.
In the wake of the awful results and guidance, Universal
Display's Sidney Rosenblatt tried to strike an upbeat tone, while
acknowledging the disappointment.
He said, "The long-term outlook for OLED technology remains
strong, despite this quarter's results." Rosenblatt elaborated on
the results by saying "Material sales in the quarter were
consistent with the first quarter of the year, reflecting what we
believe to be a temporary slowdown in industry growth. We believe
that a more indicative measure of our continued strong growth and
the outlook for OLED technology is the 29 percent growth in
year-over-year revenues over the first three quarters of the year
despite having only received half of the year's Samsung licensing
revenue."
Despite management's best efforts to put a positive spin on
the steep drop in third-quarter sales, the company's operating
loss, and slashed full-year outlook, expect for PANL to take a
swan dive at tomorrow's open.
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