Universal Display (PANL -2.8%) slumps after Samsung (SSNLF.PK -0.5% in Seoul) posts Q1 results in-line with its projections. As usual, Samsung didn't provide details about phone sales, though it did note smartphone sales fell by a single-digit % Q/Q in the seasonally weak quarter (rivals often fared worse), and expected "weak seasonality to continue" in the smartphone market ahead of a 2H pickup. Still, Galaxy S III sales were steady in Q1 ahead of the S IV launch, and Note II sales rose. Also: Larry Page appears to be a fan of Samsung's OLED displays. (Samsung slides)
Samsung's (SSNLF.PK) Galaxy S IV is a superb phone, if one can cope with a cheap plastic feel and too many gimmicks. That seems to be the consensus from the first full reviews. The Verge praises the S IV's display, camera, and performance, but still considers the HTC One a better bet. "The Galaxy S4 is fast and impressive, but it's also noisy and complex." TechCrunch and Gizmodo deliver similar takes. But others (I, II) make the case that more is ultimately better (this mindset has worked for Samsung thus far). The reviews arrive as Sprint and T-Mobile state their S IV launches will be delayed due to inventory issues. Key suppliers: QCOM, BRCM, SYNA, PANL, ATML, RFMD, TQNT. (previous)
Oppenheimer upgrades Universal Display (PANL +3.5%) to Outperform. The firm argues strong smartphone demand will allow the market for small OLED displays to post a 42% CAGR from 2010 to 2015, and that OLED TV growth will contribute to a 70% CAGR over this time for total shipment area. Oppenheimer also likes PANL's operating model, and the "lack of real competition" in the market for phosphorescent OLED materials (used in OLED lighting applications). Needham upgraded PANL last week.
Samsung (SSNLF.PK) sold 68M-70M smartphones in Q1, up from an estimated 63M in Q4, according to 5 analysts polled by Reuters. Though the Galaxy S III/IV and Note II receive far more ink, much of this growth is fueled by low-end/mid-range Android models such as the Galaxy Young and Galaxy Fame. These phones, along with Samsung's Rex feature phone line, are adding to the pressure placed on Nokia's (NOK) feature phone ops. Earlier this week, Bernstein reported the S IV's production rate is around 10M units/month. (Samsung Q1 results)
Needham upgrades Universal Display (PANL +5.4%) to Buy, citing "growing confidence" in ramping materials sales to Samsung and a valuation of 18.5x 2014E EPS (exc. net cash). Cowen recently declared strong Galaxy S IV pre-order activity in the U.K. a positive for PANL. Shares have mostly been range-bound for the last 2 months.
Universal Display (PANL) +5.2% after Goldman sings the company's praises in the wake of Samsung's Galaxy S IV launch. The firm thinks PANL's revenue opportunity with the S IV, which (as expected) sports a 5" 1080p OLED display using green host materials, could be 3x-4x greater than its opportunity with the S III. It might also help that initial S IV reviews generally praise the phone's display, though not everything else about it.
The Nokia (NOK -0.7%) Lumia 928 (codenamed Laser) will hit Verizon in April, sources tell The Verge. The 928 is said to feature an aluminum body (previous) rather than the polycarbonate body used by the 920, something that will help make the device thinner/lighter. It will also reportedly have a Xenon/LED flash and OLED display - the 920 uses an IPS LCD display and LED flash. (41MP sensor phone rumors: I, II)
Samsung's (SSNLF.PK) Galaxy S IV will indeed use green OLED host emitter materials, SamMobile reports, while adding their use will make the S IV's display 25% more power-efficient. Universal Display (PANL +2%) is higher, though it looks as if the news was partly priced in following Cowen's Feb. 6 report. The S IV, due to be unveiled on Thursday, is also said to feature "floating touch" technology that allows a user's finger to act as a cursor when hovering above a screen. (previous)
Testing the limits of thumb reach and pant pockets, Samsung (SSNLF.PK) is working on a Galaxy Note phone with a 5.9" OLED display, the Korea Times reports. The report, which also mentions the phone will use Samsung's nominally 8-core Exynos Octa processor, may have given a lift to Universal Display (PANL +5.9%), since a larger display requires more OLED materials. Yesterday, Reuters observed PANL is counting on OLED TV sales to pick up in 2014 - the first models are priced to be niche items.
A short squeeze and positive sell-side notes help Universal Display (PANL +11.4%) shoot back above $30 following its mixed Q4 results. Cowen and Deutsche both think PANL's 2013 guidance is conservative, and the former sees Samsung's Galaxy S IV, OLED TV sales, and new licenses all acting as catalysts. On the earnings call, management noted LG Display (LPL) plans to spend 54% of its 2013 capex on OLED production, and that it's discussing "commercialization roadmaps" with partners for its encapsulation tech, which is seen as key to flexible OLEDs.
More on Universal Display: The company is guiding for 2013 revenue of $110M-$125M vs. a $122.5M consensus. Q4 material sales -7% Y/Y to $10.1M (hurt by Samsung's delayed green emitter use). Royalty & license fees +184% to $15.4M (fueled by the Samsung smartphone boom). 93% gross margin on material sales. R&D spending +34% Y/Y to $8M, SG&A -15% to $4.8M. PANL +0.7% AH. CC at 5PM ET (webcast). (PR)