This Holding's 'Blue' Technology Is Starting to Shine
Increasing adoption rates for this display and illumination technology suggest conservative forward guidance
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The continued shift toward organic light-emitting diode displays across smartphones, monitors, TVs, and other applications led Universal Display OLED to deliver consensus-topping quarterly results. While management reiterated its 2025 revenue guidance of $640 million-$700 million, annualizing March-ending quarter revenue of $166.28 million equates to $665 million, which leads us to think it is being conservative given tariff uncertainty and its near-term impact on devices.
Supporting that line of reasoning, Universal provided some fresh figures from research firm Omdia that sees organic light emitting diode adoption in smartphones growing mid-single digits this year to 848 million units; tablets, laptops, and monitors up 16% year-over-year to 27 million units; and TVs using the display technology rising 4.5% year-over-year to 7.1 million units. Those figures as well as adoption in the auto market and others keep us long-term bullish on OLED shares. We also saw Universal reach a key milestone with its blue offering as LG Display LPL announced yesterday it is ready to commence commercialized volumes.
This is key because much like with light-emitting diodes (LED), commercialized blue rounds out all three primary colors but also blue is the gateway to white organic light-emitting diodes. While we are not ones to jump the gun, we would point out that was one of the final hurdles for the LED market to attack the general lighting market. This bodes well not only for materials demand for Universal, but it will likely trigger negotiations for its royalty and licensing fee segment that carries significantly higher margins. It also reaffirms our long-term stance on OLED shares.
Despite the near-term uncertainty tied to tariffs, with the benefit of some hindsight, our mid-April buy at $116.27 looks even more well-timed. Helping blunt that uncertainty, which led Universal to not issue specific June quarter guidance, the company did announce a new share repurchase program that authorizes it to purchase up to $100 million of common stock. It also announced its next quarterly dividend of $0.45 will be paid on June 30 to shareholders of record on June 16.
As clarity on the trade front comes, we will revisit what that means for market segments that are driving the adoption of organic light-emitting diodes. At the same time, we will also monitor demand signals from companies involved in the supply chain for those products. With that in mind, we will be keenly interested in Taiwan Semi’s TSM April revenue report and company comments during the upcoming May
