Corning Incorporated

Corning Incorporated (GLW - Snapshot Report) confirmed its guidance for strong second quarter growth as sales of LCD TV units rose 30% in the first four months of the year. Sales are expected to rise 20% year-over-year in the second quarter. The company has surprised on estimates in each of the last four quarters on average of 4.07%.

Full Analysis

Corning Inc., a Zacks #2 Rank (Buy), manufactures specialty glass and ceramics. Its products are found in consumer electronics, mobile emissions control, telecommunications and in life science applications.

The company's 7,000 products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other optics and specialty glass solutions.

Corning Reports Strong Growth

On Apr 29, Corning reported first quarter earnings and beat Wall Street estimates by 4.76%, or 2 cents per share. Earnings per share were 44 cents compared to analysts' estimates of 42 cents per share. The company had previously guided in the range of 41 to 43 cents. Earnings per share rose 57% from the year-ago quarter.

Sales increased 24% to $1.62 billion compared to first-quarter 2007. The company said sales and earnings comparisons benefited from the weaker U.S. dollar, especially against the Japanese yen.

Gross margins were 52% in the period, a company record.

Corning Confirms Second Quarter Guidance

On May 29, Corning reiterated second-quarter guidance of earnings per share in the range of 47 to 50 cents and sales of $1.71 billion to $1.75 billion. The sales forecast is an increase of 20% over the second quarter of 2007.

The company confirmed that it is not seeing evidence of an economic downturn affecting LCD TV sales in the U.S. To the contrary, GLW said that LCD TV unit sales were up at least 30% year-over-year for each of the first four months of 2008. The company expects sales of LCD TVs to continue to be strong.

Income

Corning pays a current quarterly dividend of 5 cents per share for a dividend yield of 0.70%. The dividend yield is high for the fiber optics sector where most companies do not pay any dividend. The industry has an average dividend yield of 0%.

Brokerage analysts have raised estimates for 2008 in the last 60 days by 10.4% to $1.91 from $1.73. Analysts also expect year-over-year growth of 35.32%.