Universal Display, a maker of OLED technology and components, told investors on Thursday that its 2020 revenue could take a 10% hit because of Coronavirus-related disruptions.
Universal Display (OLED) - Get Report, which provides components directly or indirectly to a range of device makers, including Apple , said that its annual revenue will come in $40 million to $50 million lower than originally expected because of the widespread impacts of the virus. Its shares were volatile in after-hours trading, but down 3% overall as investors digested the results.
For the December quarter, Universal display posted lower-than-expected earnings, at 56 cents versus analyst forecasts of 74 cents per share, and revenue roughly in-line with forecasts at $101.7 million. Looking ahead, however, the company slashed its annual sales forecast to between $430 million to $470 million.
“For 2020, we expect the OLED industry and our revenues to continue to grow. At the same time, after a year of significant new OLED capacity additions, we also expect capacity digestion and the evolving uncertainties related to the novel coronavirus (2019-nCoV) to impact our material orders." said Sidney Rosenblatt, CFO of Universal Display.
Universal Display management described the revenue impact as a combination of supply chain disruptions and diminished customer demand owing to the Coronavirus -- and described the 2020 revenue target as "the best they could come up with" based on the continued high level of uncertainty.
"Ultimately, we think it's highly likely the demand will work its way back through the supply chain, but it's too soon to predict when," said Rosenblatt. "It's a dynamic and evolving situation."
Based on updated figures released by China's health authority, the Coronavirus has killed more than 2000 and sickened thousands more, with 74,576 confirmed cases as of Wednesday. The crisis has led to widespread travel restrictions and labor shortages in and around Wuhan, where the virus originated.
Apple informed investors days ago that its March quarter revenue will come in lower than the $63 billion to $67 billion it originally projected, but didn't provide any specific figures. In the coming weeks, investors may more detail from suppliers working in the region on what impacts the outbreak has had on their operations.
Trendforce, a supply chain analytics firm, estimated in a report this week that smartphone production will see the lowest output of any quarter within the past five years due to Coronavirus-related disruptions.