Universal Display Downgrades Forecast on ‘Slowdown’ in ‘Premium’ Smartphones

OLED technology and materials supplier Universal Display sharply downgraded its fiscal-year revenue target Thursday after incurring a 22 percent Q1 sales decline it blamed partly on the “short-term slowdown” in the “premium” OLED smartphone market. The slowdown, which Universal expects will last through Q2, “is impairing our customers’ production plans, which in turn, we believe, is impacting our materials business,” said CEO Steve Abramson on a Thursday earnings call. In Q1, Universal's revenue from OLED materials sales fell 46 percent -- “faster and to a greater magnitude than we expected,” said Abramson. The declines prompted Universal to lower its fiscal-year revenue target to a range of $280 million to $310 million, from $350 million to $380 million in its February forecast. Nevertheless, Universal shares closed 12.4 percent higher Friday at $102.20. From the “standpoint” of OLED materials sales, “we believe Q1 represents the bottom for the year,” and the “long-term OLED market fundamentals remain robust,” said Abramson. “OLED mobile panel makers are improving yields and costs, which are expected to further increase OLED's competitiveness,” he said. OLED TVs “are continuing to garner interest from a number of OEMs,” and are “gaining market share” in the premium TV market, while R&D activity in foldable OLED products “is accelerating,” he said. Over the past decade, OLEDs “have penetrated only a little more than 10 percent of the consumer electronics display market,” he said. “This we believe is just the beginning of the technology's promising potential.”