What's happening: Shares of Universal Display Corporation (NASDAQ:OLED) fell as much as 10% early Friday, then partially recovered to trade down around 8% as of 12:40 p.m. after the OLED technologist reported weaker-than-expected second-quarter results.

Specifically, quarterly revenue fell 9.4% year over year to $58.1 million, which -- based on generally accepted accounting principles -- translated to a surprise net loss of $11.8 million, or $0.25 per diluted share. However, that GAAP net loss included a one-time $33 million writedown of host material inventory and associated work-in-process, Universal Display says, "resulting from a customer's faster-than-expected reduction in demand for this material."

Excluding that item, Universal Display's adjusted net income was $19.4 million, or $0.41 per diluted share. But analysts, on average, were still modeling higher revenue of $63.3 million, and adjusted earnings of $0.45 per share.

Why it's happening: Universal Display CFO Sid Rosenblatt added, "Dynamic shifts in market strategies resulted in numerous new product introductions that utilized our new red and green emitters. At the same time, these shifts also negatively affected demand for established products that used our existing host material..."

During the subsequent conference call, he also elaborated that the writedown was "substantially all green host" materials with significant lead times -- some in excess of nine months -- with roughly two-thirds work-in-process, and around one-third inventory that was finished goods. Keeping in mind Samsung has not only debuted several massively popular new OLED devices in recent months, but also began to shift its green host materials production late last year to an acquired affiliate, Cheil Industries, it seems clear this is the customer to which UDC is referring. 

At the same time, management highlighted the that fact adoption of their latest phosphorescent OLED emitter materials -- which customers are required to purchase and license given the scope of UDC's patent portfolio -- has never been stronger. Scores of new OLED products are hitting the market and in development, from the continued roll-out of new Samsung smartphones and tablets, to the impending ramp in production of LG Display's OLED TVs, the recent release of the Apple Watch, and early development in displays and lighting from large customers in both China (BOE) and Japan (AU Optronics, Japan Display).

Investors should also remember shares of Universal Display are still up nearly 50% so far in 2015, on the heels of signing its new long-term license and material supply agreement with LG Display in January. All things considered, it seems to me Universal Display's long-term story is still firmly intact.

Steve Symington owns shares of Apple and Universal Display. The Motley Fool recommends AAPL and OLED and owns shares of those two stocks. 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.