Why Universal Display Shares Are Going Dim
Nov 8th 2012 3:48PM
Updated Nov 8th 2012 3:56PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of LED supplier Universal Display (NAS: PANL) plummeted 18% today after its quarterly results and guidance missed Wall Street expectations.
So what: The company's third-quarter miss was so wide -- EPS loss of $0.12 on revenue of $12.5 million versus Wall Street's estimate of a $0.02 profit and a top-line of $18.6 million -- that analysts have no choice but to lower their valuation estimates yet again. Management cited weaker materials sales and license fees for the miss, reinforcing serious concerns over a prolonged slowdown in the industry.
Now what: Management now sees full-year revenue of $80 million-$82 million, down from its prior view of $90 million-$110 million and well below the consensus of $100 million. "We have never taken a short-term focus," CEO Steve Abramson reassured analysts in a conference call. "We believe more strongly than ever that despite this near-term slowdown a road to greater OLED adoption continues to stretch far and wide before us." With the stock now down more than 50% over the past year and trading at a forward P/E of 14, now might even be a good time to buy into those still-attractive long-term trends.
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The article Why Universal Display Shares Are Going Dim originally appeared on Fool.com.Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Universal Display. Motley Fool newsletter services recommend Universal Display . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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