Universal Display jumps 17% as smartphone makers add flex screens

Shares of Ewing, N.J.-based  Universal Display Corp. jumped 25 percent to $112 on Friday morning, boosting the company's stock market value above $5 billion for the first time.

"It takes a few decades to be an overnight success," cracked CEO Steve Abramson, in a quarterly conference call with shareholders to brag about the company's rising sales and profits and projected new orders.

The  200-person company, which develops thin, low-power "organic" light-emitting diode (OLED) screens for use in smartphones and other advanced products, went public in 1996. 

Universal Display hires scientists and acquires patents to develop power-conducting pigments and processes, which the company licenses to Foxconn and other manufacturers of Samsung, Apple and rival smartphones and other light-dependent tech.

Revenues are what investment bankers call "lumpy." Sales totalled $56 million for the fourth quarter, nearly double the $30 million posted a year ago but down from $75 million in the last quarter of 2016, traditionally the busiest time of the year. 

Abramson credited "new capacity coming on line, and product mix." Universal Dispay is "tracking well ahead" of last year, Goldman Sachs analyst Brian Lee said in the conference call.

Net income for the quarter was $10.6 million, up from less than $2 million, but less than in the second and fourth quarters of 2016.

Sidney Rosenblatt, the company's chief financial officer, warned that the "multiyear capital expense cycle, and how it plays out quarter-to-quarter, is not always predictable," since orders from the big Asian electronics manufacturers "are moving targets."

"Historically we have seen things go up and down,"Rosenblatt said, but "we do believe the trajectory is up this year."

Universal Display's contract manufacturers include PPG. The company bought blue-pigment technology from BASF recently, "furthering our research efforts, Rosenblatt says. "We have a very strong balance sheet." 

OLEDS face competition from TADFs, Thermally Activated Delayed Fluouresence light emitters, warned John Quealy, in a report to clients of Tornoto-based Canaccord Financial Inc., an investment bank. He still raised his Universal Display share price target, formerly $65, to $90. 

Universal Display's leading shareholders include the MainStay Epoch, Vanguard and Waddell & Reed funds. The company's founding and managerial families also control at least 9 percent of shares.