LG Display Earnings Preview And Second Chance Sale
Esekla • 13 Comments
Esekla • 13 Comments
LG Display Earnings Preview
Why Now Is The Time To Buy LG Display
Esekla • 31 Comments
Esekla • 31 Comments
Fri, May 20, 10:56 AM
- Lam Research (LRCX +4.1%), KLA-Tencor (KLAC +2.3%), ASML (ASML +2.2%), Axcelis (ACLS +3.9%), Kulicke & Soffa (KLIC +3%), Ultratech (UTEK +3.5%), Teradyne (TER +2.3%), Rudolph Technologies (RTEC +2.6%), and Xcerra (XCRA +2.7%) are outperforming after Applied Materials (AMAT +13.2%) beat FQ2 estimates, provided FQ3 guidance that was well above consensus, and reported FQ2 orders rose 52% Q/Q and 37% Y/Y to $3.45B. The Nasdaq is up 1.2%.
- Applied's order growth was fueled in large part by display equipment orders totaling $700M, up sharply from $183M in the prior quarter and $120M a year ago. On its earnings call, AMAT said display order strength is likely to continue "over the rest of 2016," and is being driven by mobile-related OLED investments - many reports have indicated Apple plans to bring iPhones sporting OLEDs to market next year.
- OLED materials/IP provider Universal Display (OLED +5.2%) is rallying. As are display panel makers LG Display (LPL +6.5%) and AU Optronics (AUO +3.2%), each of which have been stepping up their OLED investments, and industrial laser maker Coherent (COHR +2.5%), which has recently seen an OLED-related order surge.
- Also: Applied's NAND flash-related orders more than doubled Y/Y to nearly $1B thanks to its customers' 3D NAND investments. That more than offset softer DRAM and foundry-related chip equipment demand. On the call, Applied suggested NAND orders will slow a bit in the second half of FY16, but remain strong overall. Foundry demand is expected to grow somewhat this year, with Applied gaining share. Industry wafer fab equipment demand is expected to be flat to slightly up.
- B. Riley has upgraded Applied to Buy, and several firms have hiked their targets. Cowen's Tim Arcuri thinks $3 in annual EPS is now possible. Credit Suisse's Farhan Ahmad: "AMAT is clearly outgrowing peers this year, driven by favourable mix shift within WFE (NAND/Foundry increasing, DRAM declining) and strong growth in Display (China/OLED investments)."
Dec. 30, 2015, 10:02 AM
- Korea's Electronic Times reports Samsung (OTC:SSNLF) and LG Display (LPL -0.6%) are close to final deals with Apple (NASDAQ:AAPL) to supply OLED displays for iPhones.
- It adds the companies plan to spend a combined KRW15T ($12.8B) in capex over the next 2-3 years to expand their OLED capacity, and that (in-line with past deals with suppliers) Apple will likely provide some funding to help the companies with their investments. Samsung will likely get bigger order volumes than LG.
- The report follows one from Japan's Nikkei a month ago stating Apple will launch iPhones featuring OLEDs in 2018, and that the company will work with suppliers "over the next year or so" to see if it can obtain enough displays and eliminate technical issues such as performance degradation.
- OLED IP/materials supplier Universal Display (OLED +5.1%) is rallying once more, after having previously done so on the Nikkei report. Shares are within $3 of a 52-week high of $57.93, and up 99% YTD.
Nov. 27, 2015, 10:26 AM
- A piece in the Nikkei Asian Review says Apple "plans to introduce organic light-emitting diode displays for iPhones starting in 2018," though no sources are cited.
- Cowen's Robert Stone - who has Outperform ratings on both Universal Display (OLED +6.1%) and LG Display (LPL +1.1%) - expects Apple to eventually adopt an AMOLED display, subject to establishing sufficient capacity. "Capacity commitments are apparently being sought for 2018, by which time we expect the technology of choice is likely to be on flexible substrate."
- In the meantime, he says, look for AMOLED's (both rigid and flexible) to continue taking market share from LCD displays with other smartphone OEMs in China and elsewhere.
- Source: Barron's
Nov. 25, 2015, 3:09 PM
- Japan's Nikkei reports Apple (AAPL -0.5%) will launch iPhones sporting OLED displays starting in 2018. To date, the company has exclusively used LCDs for its retina displays.
- The paper adds securing enough OLEDs to meet Apple's needs (the company sells over 200M iPhones/year) could be difficult, and that Apple will "work over the next year or so" with suppliers to see if it can obtain enough displays and eliminate technical drawbacks such as performance degradation.
- iPhone LCD supplier LG Display (LPL +6.9%), which has already unveiled plans to invest ~$8.5B in OLED manufacturing through 2018, is said to be "planning capacity upgrades." OLED materials/IP provider Universal Display (OLED +5.2%) have caught a bid on the Nikkei's report; LPL was already higher on the day.
- OLEDs have long been a staple on Samsung's Galaxy S and Note lines. Supporters of the technology praise its high contrast/deep blacks and potential thickness and power consumption advantages. Apple, however, has argued its LCDs provide superior color accuracy.
- There have long been rumors Apple is thinking of adopting OLEDs. The company recently filed a patent application for an integrated OLED display and touch panel, with a fingerprint reader located underneath.
- Earlier: Apple buys Star Wars motion capture tech developer Faceshift
- Five months ago: Apple reportedly working on iPhone design that eliminates home button
Nov. 19, 2015, 12:36 PM
- Universal Display (OLED +9.6%) is up 17% over the last two days. Possibly helping: The USPTO has published a patent application from Apple (has long been the subject of rumors it's testing/thinking of using OLEDs) for an integrated OLED display and touch panel, with a fingerprint reader underneath.
- In the application, Apple (NASDAQ:AAPL) states integrating an OLED stack and touch sensors on a silicon substrate "can allow for an extremely high number of pixels per inch," and that arranging OLED sub-pixels side-by-side with touch sensors "can also lead to a wider viewing angle display with a higher contrast ratio, higher brightness, and more vibrant colors without compromising touch sensitivity."
- Also: Reuters has published an article highlighting LG's recent OLED TV price cuts, made possible by recent production improvements and plant investments. Two sets now sell for less than $2K. LG Display (LPL +3.2%) recently promised to invest at least KRW10T ($8.5B) in OLED manufacturing through 2018.
- Universal jumped two weeks ago after beating Q3 estimates and narrowing its full-year guidance. Shares are at their highest levels since August.
- Update: Also of note: Korea's Digital Times reports LG Display plans to invest (perhaps using the funds previously allocated for OLED expansion) up to $4.2B to build a new OLED plant in Paju, South Koirea. The plant is expected to go into production in the 2017-2018 timeframe.
Aug. 17, 2015, 6:19 PM
- LG Display (NYSE:LPL) plans to invest at least KRW10T ($8.47B) in OLED manufacturing through 2018, aiming for a bigger chunk of a growing market in which Samsung is still easily the biggest player. The investments will go towards both large-screen OLED panels for TV sets and signs, and smaller panels for phones/tablets, wearables, and cars.
- Could some of the capacity go towards panels used by Apple? LG currently supplies OLEDs for the Apple Watch, and there's speculation Apple will use OLEDs in future iPhones/iPads.
- Universal Display (NASDAQ:OLED) is seven months removed from striking a licensing deal with LPL that lasts until 2022. Universal's shares rose 5% today to $40.67.
May 20, 2015, 12:29 PM
- Apple (NASDAQ:AAPL) will follow up on its use of OLED displays for the Apple Watch by launching iPhones and iPads sporting OLEDs in the 2016/2017 timeframe, argues The Motley Fool's Steve Symington in a column today.
- Symington notes Apple has reportedly contracted Foxconn and Innolux to build a $2.6B plant to make flexible OLEDs for both smartphones and wearables, and that a JV launched by Japan Display, Sony, and Panasonic (known as JOLED) has reportedly been contracted by Apple to produce OLEDs for next-gen iPads.
- Universal Display (OLED +2.2%) has made fresh highs, and is now up 89% YTD. Shares jumped two weeks ago after the company disclosed a $45M Q/Q increase in its deferred revenue balance within its Q1 report.
- Also: LG Display (LPL +0.9%) recently showed off a 55" OLED panel prototype that's only 0.97mm thick - far thinner than its existing 55" panel (4.3mm). The prototype weighs only 1.9kg, and can be stuck to a wall using a magnetic mat.
- LG, which struck a new licensing deal with Universal earlier this year, says it plans to ramp OLED production in Q3, and is respectively aiming for 2015 and 2016 unit shipments of 600K and 1.5M.
Mar. 5, 2015, 2:11 PM
- "LG will have [a high dynamic range] OLED solution available this year. We expect we’ll start to make a bit more noise about this around the time of the IFA technology show in September," says LG exec Robert Taylor. He adds creating an HDR OLED set is a priority for LG, and that the self-emissive nature of OLEDs makes them a superior solution for HDR than LCDs.
- Taylor cautions commercializing HDR remains a work in progress. "[W]e’ve got the easy job; we display it. The broadcasters and the movie studios are the ones who have to figure out how to code it, how to distribute it, how to commercialize it, how to infrastructure it. And they’re just not there yet."
- LG recently unveiled a curved 65" 4K OLED set that will sell for a steep $8,999 in April. Subsidiary LG Display (LPL -0.7%) significantly expanded OLED production in December, and plans to create a new large-panel OLED production line later this year; Samsung still accounts for the lion's share of OLED panel output.
- Universal Display (OLED) is up strongly today, adding to the big Monday gains it saw after Samsung launched the Galaxy S6.
Jan. 26, 2015, 9:16 AM
- Universal Display (NASDAQ:OLED) has struck an OLED patent licensing deal with LG Display (NYSE:LPL) that runs through the end of 2022. Universal will also supply LG with phosphorescent OLED materials.
- The licensing deal features license fees and running royalties. Universal CEO Steven Abramson: "We are excited to enter into these agreements with our long-term partner LG Display, a global technology innovator who is leading the charge for OLED TVs, evidenced by its recent CES showcase of new 4K models ranging from 55, 65 and 77 in flexible, curved and flat form factors."
- Depending on LG's production ramp, the deal could lower Universal's dependence on top customer Samsung, which recently opted not to use Universal's host materials in new hardware. Universal has risen to $35 in premarket trading.
- Previously: Universal strikes licensing deal with Sumitomo
Jan. 14, 2015, 1:20 PM
- A slew of tech companies have posted steep losses on a day the Nasdaq is down 1%.
- Major decliners include Pandora (P -5%), LED giant Cree (CREE -5.9%), cloud HR software leader Workday (WDAY -4.1%), chipmakers Ambarella (AMBA -5.3%), Pixelworks (PXLW -3.7%), Audience (ADNC -3.6%), Spansion (CODE -4.4%), and Cypress (CY -3.9%) (the last two are merger partners), OLED materials/IP provider Universal Display (OLED -4.2%), industrial automation tech provider Echelon (ELON -4.8%), and P2P lending giant/recent IPO LendingClub (LC -4.8%).
- Possibly affecting OLED: LG Display (NYSE:LPL) has been ordered to halt operations at an OLED TV panel production line following a gas leak that killed two workers.
- Cree and Pandora aren't far removed from their 52-week lows; the former reports on Jan. 20, and the latter on Feb. 5. LendingClub, whose selloff follows a volatile Tuesday, could be affected by a neutral coverage launch from Susquehanna.
Dec. 18, 2014, 9:20 AM
- Believing TV demand will be strong in the coming years as consumers upgrade their first flat-panel sets, Citi has upgraded Corning (NYSE:GLW) to Buy and hiked its target by $4 to $25.
- Last week, Corning hiked its Q4 LCD glass volume and pricing guidance, while citing stronger-than-expected LCD TV market demand. Both larger screen sizes and the adoption of 4K sets has been boosting demand.
- NPD recently observed 32" and smaller TV sets accounted for the less than half of Thanksgiving week sales for the first time. Demand for larger sets rose sharply, with 50-64" sets seeing more sales than 33-49" sets. 65" and larger sets managed to account for over 5% of volume.
- Stronger demand for larger sets also benefits LCD panel suppliers AU Optronics (NYSE:AUO) and LG Display (NYSE:LPL).
- Yesterday: Dow Corning shuttering plant
Nov. 3, 2014, 1:12 PM
- Canaccord's Jonathan Dorsheimer believes Universal Display (NASDAQ:OLED) is set to lose OLED green host material share to Samsung affiliate Cheil industries for the Galaxy S5, and also sees Samsung using Cheil as a supplier for future phones.
- In a base case scenario, Dorsheimer sees Universal losing 33% of its 2H14 green host sales, and 50% in 2015 and beyond. He estimates such a loss would respectively affect 2H14, 2015, and 2016 sales by $8.4M, $30.4M, and $29.4M. A bear-case scenario of 100% share loss yields estimated revenue losses of $16.7M, $60.8M, and $58.8M.
- Dorsheimer does note Universal could benefit from Apple Watch-related materials sales - Apple Watch is believed to feature an OLED display, and Universal client LG Display (LPL -0.3%) is the rumored supplier. But he thinks the device might only yield $1M-$2M in quarterly revenue for Universal.
- Q3 results are due on Thursday. Universal plunged in July in response to news Samsung/Cheil is buying German OLED materials provider Novaled, but rebounded after analysts argued Novaled's offerings are complementary.
Oct. 20, 2014, 1:40 PM
- Just 4 days after Credit Suisse cut LG Display (LPL +3.7%) to Underperform (and peer AU Optroniics to Neutral), CLSA has given the LCD panel maker a 2-notch upgraded to Outperform.
- The firm thinks the recent selloff sparked by Japan Display's weak guidance is overdone. A source told Bloomberg Japan Display (a reported iPhone 6 LCD supplier, like LG) failed to secure parts needed to meet Apple's orders, and also expects shipments to Sony to fall.
Oct. 16, 2014, 9:51 AM
- Credit Suisse has downgraded AU Optronics (AUO -3%) to Neutral, and fellow LCD panel maker LG Display (LPL -4.3%) to Underperform.
- Two days ago, BofA/Merrill downgraded LCD glass giant Corning. Among other things, it cited the potential for slowing TV unit growth and softer-than-expected 4K TV adoption.
Jun. 27, 2014, 12:14 PM
- Goldman, a long-time Universal Display (OLED +7.3%) bull, has issued another upbeat note: The firm sees a variety of upcoming mobile, TV, and wearables product launches boosting Universal's growth.
- Goldman recently argued Samsung's new Galaxy Tab S (features a 2K OLED display) will act as a positive catalyst; volumes should be much lower than the Galaxy S5 and Note 3's, but revenue/device higher.
- Separately, Korean media reports state LG Display (LPL +1.6%) plans to spend $788M to expand OLED production, in part to address the nascent OLED TV market (has seen some recent exits). For his part, LPL CEO Han Sang-beom says his company is thinking of expanding production of plastic OLEDs for smartphones and smartwatches.
- Reuters previously reported LPL will be the exclusive display supplier for Apple's iWatch. The Nikkei has reported the iWatch will feature a curved OLED display.
Jan. 21, 2014, 9:57 AM
- 3D Systems (DDD -3%) has been cut to Neutral by Credit Suisse.
- Seagate (STX +2.1%) has been upgraded to Overweight by Morgan Stanley, and rival Western Digital (WDC +0.5%) has been upgraded to Outperform by BMO. Wesern reports tomorrow, and Seagate on Jan. 27.
- SolarCity (SCTY -3.3%) has been cut to Neutral by JPMorgan. Deutsche started shares at Buy last week.
- SanDisk (SNDK -2.3%) has been cut to Neutral by BofA/Merrill. Q4 results arrive tomorrow.
- NetApp (NTAP +2.2%) has been upgraded to Buy by Lake Street Capital.
- InvenSense (INVN -2.8%) has been cut to Hold by Needham.
- FireEye (FEYE -3.7%) has been cut to Neutral by JPMorgan following a huge run-up in the wake of the Mandiant deal and the company's guidance hike.
- Altera (ALTR +2.8%) has been upgraded to Overweight by JPMorgan ahead of Wednesday's Q4 report.
- Tibco (TIBX -2.4%) has been cut to Neutral by Wedbush. Shares rallied last week on a report suggesting Dan Loeb is set to make an activist push.
- NetSuite (N +1.1%) has been upgraded to Buy by Maxim.
- Violin Memory (VMEM -3.7%) has been cut to Underweight by Barclays.
- Motorola Solutions (MSI +1.8%) has been upgraded to Buy by Citi.
- LG Display (LPL +3.2%) has been upgraded to Buy by BofA/Merrill.
LG Display Co., Ltd. is engaged in the development, production, and sale of thin film transistor (TFT) liquid crystal display (LCD) panels. It operates through the following business divisions: TFT-LCD, Flexible Display, and Organic Light-Emitting Diode (OLED). The TFT-LCD division provides LCDs... More
Industry: Diversified Electronics
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