What happened
Shares of Universal Display (OLED 0.82%) were up 22.7% as of 2:30 p.m. EST Friday after the OLED technologist announced strong fourth-quarter results and 2019 guidance.
On the former, Universal Display's reported quarterly revenue declined 39.5% to $70.1 million, bringing full-year revenue to $247.4 million -- near the high end of guidance provided in November for a range of $240 million to $250 million. On the bottom line, Universal Display's net income fell 41.5% to $19.2 million, or $0.40 per share, far above the $0.29 per share most investors were expecting.
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So what
Investors should note that Universal Display's top- and bottom-line declines were more pronounced because of its adoption of new ASC-606 accounting standards that changed its revenue-recognition requirements. Under the previous ASC-605 standards, UDC's revenue would have arrived at $92.9 million, and net income would have climbed to $45.2 million, or $0.95 per share. Adjusted full-year revenue also would have arrived at $326.3 million, above the high end of UDC's guidance for a range of $315 million to $325 million.
If that weren't enough, Universal Display also nearly doubled its quarterly dividend from $0.06 per share to $0.10 per share.
"New OLED capacity announcements, a diversifying list of panel manufacturers entering commercial OLED production, and a broadening landscape of consumer OLED end products in 2018 has positioned the OLED industry for what we anticipate will be its next wave of growth," stated Universal Display CFO Sid Rosenblatt.
Check out the latest Universal Display earnings call transcript.
Now what
Finally, for the full-year 2019, Universal Display called for reported revenue to climb to a range of $325 million to $350 million (or $395 million to $420 million under its old accounting standard), representing growth of 36.4% at the midpoint. Though we don't usually pay close attention to Wall Street's demands, most analysts were modeling slightly more conservative 35% growth.
Put simply, this beat-and-raise performance effectively validates that Universal Display is still early in its long-term growth story, giving bullish shareholders every reason to stay excited for what's to come.
