OLED Q1 Earnings Beat on Strength in Consumer Electronics & IT Markets

Universal Display Corporation OLED reported strong first-quarter 2025 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate. The company reported a marginal top-line growth year over year, backed by higher royalty and licensing revenues.

Growing OLED proliferation in multiple end markets, a strong balance sheet and robust supply chain are major growth drivers. 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 first quarter was $64.4 million or $1.35 per share compared with $56.9 million or $1.19 in the year-ago quarter. Lower operating expenses supported the net income growth. The bottom line beat the Zacks Consensus Estimate by 28 cents. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Revenues of OLED

The company generated $166.3 million in revenues, up from $165.3 million in the year-ago quarter. Higher royalty and license fees boosted the top line. The top line beat the consensus estimate of $155 million.

Material sales contributed $86.2 million to revenues compared with $93.3 million in the prior-year quarter. The top line missed our estimate of $92.9 million. Revenues from green emitter sales declined to $64 million from $71 million in the year-ago quarter, whereas the same from red emitter sales was $21 million, matching the figure of the year-ago quarter.

Revenues from royalties and license fees were $73.6 million, up from $68.3 million in the year-ago quarter. The top line beat our estimate of $58.7 million.

Revenues from Contract research services were $6.6 million compared with $3.7 million in the prior-year quarter. The segment’s revenues beat our estimate of $2.2 million.

Other Details of OLED

Quarterly gross profit was $128.1 million compared to $128.3 million in the prior-year quarter. The gross margin was 77%, down from 78% a year ago. Operating income was $69.7 million and the margin was 42% compared with the year-ago quarter’s $62.9 million and 38%, respectively.

OLED’s Cash Flow & Liquidity

In the first quarter, Universal Display generated $30.6 million in cash from operating activities compared with $72.2 million in the year-ago period. As of March 31, 2025, the company had $157.5 million in cash and cash equivalents and $54.9 million in retirement plan benefit liability.

OLED’s Guidance

For 2025, the company expects revenues of $640-$700 million. The gross margin is predicted at 76-77%.

Despite some uncertainties in the near term, associated with geopolitical volatilities and imposition of tariffs, management remains optimistic about the company’s long-term growth potential. Growing OLED usage in IT applications encompassing tablets, laptops, monitors, automotive and various other consumer electronics applications, such as smartphones and TVs, will likely drive growth in the upcoming quarters.

OLED’s Zacks Rank & Stocks to Consider

Universal Display currently carries a Zacks Rank #3 (Hold).

Ubiquiti Inc UI carries a Zacks Rank #2 (Buy) at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. In the trailing four quarters, Ubiquiti delivered an earnings surprise of 7.48%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

InterDigital IDCC sports a Zacks Rank #1 at present. In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.

Ericsson ERIC carries a Zacks Rank #2 at present. Ericsson is well-positioned to cash in on the market momentum with its competitive 5G product portfolio. The company continues to execute its strategy to become a leading mobile infrastructure provider and establish a focused enterprise business. In the last reported quarter, Ericsson delivered an earnings surprise of 33.33%.

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