Brigantine Advisors’s Darice Liu and Cowen & Co.’s Robert Stone both weighed in this morning on what to expect from organic light-emitting diode technology maker Universal Display (PANL) when it reports its Q4 results tomorrow, after the bell.
The Street consensus is for $17.9 million in revenue and 5 cents a share in profit.
Cowen’s Stone, who has an Outperform rating on the shares, is estimating $18 million in revenue and 3 cents a share in profit.
“We wouldn’t expect a massive beat like Q3,” he opines, “which was driven by new host materials.” Stone models gross margin below Street estimates because of expenses, with legal expenses for the company to defend its patent position being the “main wildcard.”
Stone also thinks it is likely too soon for the company to increase its 2012 forecast, which stands at $90 million to $110 million in revenue.
He does, however, think that during the course of this year there will be more information about Universal’s deal with Samsung Electronics (005930KS), which may help to give investors greater confidence in Universal’s outlook.
Stone also likes the prospect of OLED television sets becoming a meaningful market for Universal at some point:
Pricing, launch dates, and likely volume are tough to call precisely. However, we don’t see downside to our model. Our unit assumptions are likely to be offset by significantly higher prices (we hadn’t expected the first models to be 55-inch) and more chemical usage at early yields. Moreover, LG and Samsung launches already appear to be driving other OEMs to play catch up.
Liu, who has a Buy rating on Universal stock and a $59 price target, is modeling $18.4 million in revenue, and 5 cents a share.
Liu also thinks the ! company will stick with the existing forecast, as that’s the “pragmatic” thing to do. She expects the conference call to include discussion of of green host material, new potential customers for such material, issues around OLED display fab activity, the possibility of work with Chinese display makers, and OLED TVs.
As for the Samsung issue, Liu thinks something might be said:
We expect management to address the revenue recognition of Samsung Mobile Display�s (SMD) license fees. Currently, SMD is scheduled to make biannual lump payments: 2Q and 4Q, but most on the Street (including ourselves) are modeling linear growth throughout the year. Note that 2011 was different due to the timing of the agreement.
Universal shares today are off 5 cents at $45.26.
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