Universal Display's Bright and Vivid Future
Universal Display (NAS: PANL) recently released its earnings forecast for the year, coming in below analyst expectations. Stock price fell by about 6%.
Nevertheless, I feel that investors should not turn a blind eye to the company's long-term potential in the OLED space. The technology is new and is a promising replacement for the age-old LCD display. So, just how can this be great for Universal Display?
Back in the Black
Well, first of all, the company -- which specializes in research, development, and materials for manufacturing OLED panels -- seems to have ended its long string of losses, and started making profits in the second quarter of last year.
Its recently reported fourth-quarter revenue up 73% from the year-ago quarter, to $18.7 million. Net profit clocked in at $5.7 million against a $5.3 million loss last year. It's great to see the company bringing some cash back to the table after all these years. But that's just the beginning.
With LG Display (NYS: LPL) , Samsung, and AU Optronics (NYS: AUO) currently using Universal Display's Patents and raw materials for OLEDs, the company stands to gain a lot more from the popularity of such displays in the future.
OLEDing the way
Top-notch smartphones already have OLEDs. The world's leading smartphone maker, Samsung, has the AMOLED display in its Galaxy Note and S2 smartphones -- even in its 7.7 inch Galaxy Tab.
Good ol' Nokia (NYS: NOK) also uses the AMOLED display in itsnew Lumia phones. With the soaring demand for smartphones expected to continue in the coming months and years, the number of high-end devices sporting the OLED display will rise too. But that's not all ...
This year, the Consumer Electronics Show saw two darlings of the electronics world, LG Display and Samsung, unveil 55-inch ultra-high-definition OLED televisions. Both LG Display and Samsung are expected to begin shipping their large-sized OLED televisions by the third quarter of this year.
Prices are expected to be in the $8,000 range, out of the reach of many consumers for the moment. However, display suppliers, equipment makers, and TV manufacturers are expected to cooperate with one another to develop efficient and cost-effective ways of making big AMOLED displays. This would ensure a slide in prices and make television sets affordable to a wider range of consumers.
The Foolish bottom line
With OLED set to be the standard for the next generation of displays for devices such as smartphones, tablets, and televisions, Universal Display can definitely expect to thrive in the future. Given the fact that the company has recently seen its bottom line go black for three successive quarters and has no debt on its balance sheet, I find the company's future very promising.
You wouldn't want to be left in the dark about this fantastic opportunity, right? So don't forget to stay up to speed with the latest on Universal Display by adding it to your Watchlist. It's free and lets you stay on top of the latest news and analysis of your favorite companies.
At the time this article was published Keki Fatakia does not hold shares in any of the companies mentioned in this article. Motley Fool newsletter serviceshave recommended buying shares of Universal Display and Nokia. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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