Universal Display CEO Discusses Q3 2010 Results – Earnings Call Transcript
Universal Display Corporation (
)
Q3 2010 Earnings Call Transcript
November 4, 2010 5:00 pm ET
Executives
Joe Hassett – IR
Steve Abramson – President and CEO
Sid Rosenblatt – CFO, EVP, Treasurer and Secretary
Analysts
Darice Liu – Brigantine Advisors
Josh Baribeau – Canaccord
Rob Stone – Cowen & Company
Michael Suh – Oppenheimer
Presentation
Operator
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Universal Display Corporation Q3 2009 Earnings Call Transcript
Good day and welcome to the Universal Display Corporation third quarter 2010 earnings call. Today’s conference is being recorded. At this time, I would like to turn the call over to Mr. Joe Hassett. Please go ahead, sir.
Joe Hassett
Thank you, Robert. And good afternoon, everybody. With us today are Steve Abramson, President and Chief Executive Officer; and Sid Rosenblatt, Chief Financial Officer of Universal Display Corporation. Let me begin today by reminding you that this call is a property of Universal Display. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Universal Display is strictly prohibited.
Further, as this call is being webcast live and will be made available for a period of time on Universal Display’s website. This call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, November 4, 2010.
All statements in this conference that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding Universal Display's beliefs, expectations, hopes or intentions regarding the future.
It is important to note that these statements are subject to risks and uncertainties that could cause Universal Display's actual results to differ from those projected. These risks and uncertainties are discussed in the company's periodic reports filed with the SEC. Universal Display disclaims any obligation to update any of these statements.
Now I'd like to turn the call over to Steve Abramson, President and CEO of Universal Display. Please go ahead, Steve.
Steve Abramson
Thank you, Joe. And welcome to everyone listening on today’s call and webcast. This afternoon, I will start with a quick overview of our third quarter financial results. Then I will discuss highlights from the quarter and update everyone on our latest developments to grow our business in both the display and lighting markets. Sid will then follow with more detail on our financials before we open the call to questions.
I am pleased to report that our revenues for the third quarter of 2010 rose to $7.1 million compared to $5.1 million for the same quarter of 2009. Once again this quarter, both developmental and commercial revenue were up from the same quarter a year ago and OLED products increasingly moved into the market. On an operating basis, our loss has a little change from a year ago, while the bottom line was well up, primarily due to the accounting for a stock warrant liability. Sid will provide more color on the financials after my remarks.
Our UniversalPHOLED technology and materials remain key to the brain, beautiful energy-efficient OLED displays, spurring the rapid growth of high-end smartphones and other handheld devices. As a result, the market for OLED displays continues to grow at an exponential rate. Samsung Mobile Display recently increased their estimate of the number of handheld devices they expect to be using AMOLED screens in 2015 to 700 million units. This is up from 600 million units estimated just three months ago and is 25 times higher than the current market. New capacity is coming on line.
Samsung has announced they are committed 2.2 billion to a new Gen 5.5 AMOLED plant. Reports indicate that the plant life of monthly capacity of 30 million three-inch AMOLED displays for mobile phones and that are scheduled to open in July 2011. Speaking of Samsung, we are continuing to work with them, as we negotiate towards a win-win arrangement. As you recently may have seen, we extended our existing agreement until the end of this year.
In addition, as they reported, AU Optronics is expanding its OLED production capacity and will start volume production of small to medium-sized OLED pilots in 2011. LG displays new Gen 3.5 production line is also expected to be operational by next year. LG’s UK Sales Director recently told businessgreen.com that over the next three to five years, they expect to see real evolution of the OLED market.
Given the rapid growth of the smartphone market is obviously why manufacturers are raising to add capacity. And it seems with each new smartphone introduced an AMOLED screen with its low power consumption, thinness and picture quality is a focal point of the manufacturers’ promotional campaigns.
Perhaps the strongest endorsement for OLED technology comes from Samsung who said that they have already sold more than 5 million Galaxy S smartphone handsets since launching the product in June. The Galaxy S is Samsung’s best-selling smartphone model. Sales of the Galaxy S have already almost met Samsung’s total smartphone sales last year. New OLED display smartphones keep coming.
AT&T recently introduced the Pantech Laser handset with a 3.1-inch AMOLED touchscreen display. Verizon has released the handsome OLED-equipped Droid Incredible. And then Nokia E7 features a four-inch AMOLED CBD, stands for Clear Black Display, which according to Jessica Shankleman of BusinessGreen, “It’s simply gorgeous. That four-inch clear black display really pops. We’re definitely talking super AMOLED degrees of awesome.” Still in the near-term, it is clear the market for handheld displays is creating tremendous opportunities for our proprietary OLED technologies. In addition, the opportunity for OLED displays extends well beyond the near-term in handheld devices.
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