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Will Corning (GLW) Beat Estimates this Earnings Season?

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We expect Corning Incorporated (GLW - Free Report) to beat expectations when it reports fourth-quarter 2016 results on Jan 24.In the last quarter, the company reported a positive earnings surprise of 10.53%. Notably, the company delivered positive earnings surprises in the last four quarters, with an average surprise of 8.10%.

We also note that shares of Corning have outperformed the Zacks Communications Components  industry over the last one year. While the industry gave a positive return of 40.3%, the stock gained 46.3%.

Why a Likely Positive Surprise?

Our proven model shows that Corning is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate (46 cents per share) and the Zacks Consensus Estimate (43 cents per share), stands at +6.98%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Zacks Rank #2 (Buy): Note that stocks with a Zacks Rank of #1 (Strong Buy), 2  or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.  

The combination of Corning’s Zacks Rank #2 and +6.98% ESP makes us very confident in looking for an earnings beat.

Corning Inc. Price and EPS Surprise

What is Driving the Better-Than-Expected Earnings?

Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets.

The company remains focused on expanding its footprint in the automotive market, as evident from the recently unveiled glass-enabled concept car. Additionally, stable end markets such as tablets, mobile etc. might aid the company to post an earnings beat in the to-be reported quarter.

Moreover, Corning’s recent $4 billion share repurchase program is likely to have a positive impact on the bottom-line of the company in the to-be reported quarter.

While these factors make us optimistic about an earnings beat from Corning, the company’s management expects to report weak numbers in the Specialty Materials segment due to lower-than-expected demand for mobile devices.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Seagate Technology plc (STX - Free Report) with an Earnings ESP of +1.87% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.

Microsoft Corporation (MSFT - Free Report) with an Earnings ESP of +1.28% and a Zacks Rank #2.

Applied Materials Inc. (AMAT - Free Report) with an Earnings ESP of +6.06% and a Zacks Rank #2.

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