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What's in Store for Corning (GLW) this Earnings Season?
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Corning Inc. (GLW - Free Report) is set to report third-quarter 2016 results on Oct 25. Last quarter, the company posted a positive earnings surprise of 15.63%. Over the past four quarters, the company has posted an average positive earnings surprise of 5.47%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Corning’s second-quarter earnings beat the Zacks Consensus Estimate comfortably.
In the second quarter, Corning’s sales in Display Technologies and Life Sciences segments were strong. Sales in the Optical Communications, Environmental Technologies Materials were weak. Lower smartphone and tablet demand due to adverse macroeconomic conditions affected the Specialty materials business negatively on a year-over-year basis.
Corning’s management expects glass volume to increase at a mid-single digit percentage rate sequentially in the third quarter with LCD glass price declines remaining consistent with the second quarter. Both these factors are positives for the Display business.
Optical Communications sales are expected to increase 10% year over year on strong demand.
Environmental Technologies sales are expected to decline slightly on a year-over-year basis, impacted by foreign exchange rates. Light-duty auto products market is expected to remain weak, whereas heavy-duty truck market in North America and China is expected to remain strong.
Specialty Materials sales are expected to be consistent with the year-ago quarter. New product launches in the second half of this year will be a positive for Gorilla Glass demand. Segment sales are currently expected to be flat to down slightly in 2016.
The Life Sciences business is expected to grow in low-single digits from last year.
Earnings Whispers
Our proven model does not conclusively show that Corning will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate Estimate stands at 37 cents, whereas the Zacks Consensus Estimate stands at 38 cents. Hence, the difference is -2.63%.
Zacks Rank: Corning has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
SITO Mobile, Ltd. , with an Earnings ESP of +100.00% and Zacks Rank #1
Vocera Communications, Inc. , with an Earnings ESP of +10.00% and a Zacks Rank #1
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What's in Store for Corning (GLW) this Earnings Season?
Corning Inc. (GLW - Free Report) is set to report third-quarter 2016 results on Oct 25. Last quarter, the company posted a positive earnings surprise of 15.63%. Over the past four quarters, the company has posted an average positive earnings surprise of 5.47%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Corning’s second-quarter earnings beat the Zacks Consensus Estimate comfortably.
In the second quarter, Corning’s sales in Display Technologies and Life Sciences segments were strong. Sales in the Optical Communications, Environmental Technologies Materials were weak. Lower smartphone and tablet demand due to adverse macroeconomic conditions affected the Specialty materials business negatively on a year-over-year basis.
Corning’s management expects glass volume to increase at a mid-single digit percentage rate sequentially in the third quarter with LCD glass price declines remaining consistent with the second quarter. Both these factors are positives for the Display business.
Optical Communications sales are expected to increase 10% year over year on strong demand.
Environmental Technologies sales are expected to decline slightly on a year-over-year basis, impacted by foreign exchange rates. Light-duty auto products market is expected to remain weak, whereas heavy-duty truck market in North America and China is expected to remain strong.
Specialty Materials sales are expected to be consistent with the year-ago quarter. New product launches in the second half of this year will be a positive for Gorilla Glass demand. Segment sales are currently expected to be flat to down slightly in 2016.
The Life Sciences business is expected to grow in low-single digits from last year.
Earnings Whispers
Our proven model does not conclusively show that Corning will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate Estimate stands at 37 cents, whereas the Zacks Consensus Estimate stands at 38 cents. Hence, the difference is -2.63%.
Zacks Rank: Corning has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
CORNING INC Price and EPS Surprise
CORNING INC Price and EPS Surprise | CORNING INC Quote
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Inovalon Holdings, Inc. (INOV - Free Report) , with an Earnings ESP of +50.00% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
SITO Mobile, Ltd. , with an Earnings ESP of +100.00% and Zacks Rank #1
Vocera Communications, Inc. , with an Earnings ESP of +10.00% and a Zacks Rank #1
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>