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Will Higher Revenues Drive Corning's (GLW) Earnings in Q4?

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Corning Incorporated (GLW - Free Report) is scheduled to report fourth-quarter 2020 results on Jan 27, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 13.2%. Notably, it pulled off a trailing four-quarter earnings surprise of 40.7%, on average.

Corning is expected to have recorded higher aggregate revenues year over year, largely driven by the Specialty Materials and Display Technologies businesses. The company continues to benefit from improving demand and commercialization of its innovations.

Factors at Play

During the quarter under review, Corning introduced 5G-ready terminals and connectors that are reduced to accommodate more fiber connections in smaller spaces. These will aid telecommunication network operators meet the growing demand for bandwidth.

The company announced a breakthrough in glass-ceramic technology, Corning Guardiant. Under test methods approved by the U.S. Environmental Protection Agency, paint and coatings containing Corning Guardiant were shown to kill more than 99.9% of SARS-CoV-2, the virus that causes COVID-19.

Corning and Nippon Paint China announced the launch of the latter’s first antiviral kids’ paint in China. The paint is called Nippon Kid’s Odour-Less All In One Interior Emulsion Paint-Anti Bacteria Plus. The product, which has been developed for use in spaces where children spend most of the time, contains Corning Guardiant.

Corning received a $15 million award from the U.S. Department of Defense in coordination with the Department of Health and Human Services. This investment is for the domestic production of robotic pipette tips that are used to support diagnostic testing for COVID-19. These developments are likely to have had a positive impact on the company’s top line.

The Zacks Consensus Estimate for the Optical Communications segment’s net sales is pegged at $921 million. The figure indicates a rise of 2% from the year-ago quarter’s reported figure. The higher projection reflects stability in carrier spending and deployments.

The consensus estimate for Display Technologies net sales is $820 million, which suggests an increase of 3.1% from the prior-year quarter’s reported figure. The upside can be attributed to higher glass volume.

The consensus estimate for Specialty Materials net sales is $543 million, which indicates growth of 19.9% year over year. The segment’s performance is likely to have been driven by demand for premium glasses, Corning’s glass-ceramic product and strength in its products for the IT and wearable markets.

The consensus estimate for Environmental Technologies net sales is pegged at $393 million, which suggests growth of 5.1%. The consensus estimate for Life Sciences net sales stands at $250 million, which implies a slip from $256 million reported in the prior-year quarter.

For the December quarter, the Zacks Consensus Estimate for consolidated revenues is pegged at $3,158 million, indicating growth of 10.8% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 48 cents, which suggests an increase of 4.3%.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Corning this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Corning’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 48 cents.

Corning Incorporated Price and EPS Surprise

Corning Incorporated Price and EPS Surprise

Corning Incorporated price-eps-surprise | Corning Incorporated Quote

Zacks Rank: Corning currently carries a Zacks Rank #2.

Stocks to Consider

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

United Rentals, Inc. (URI - Free Report) is slated to release fourth-quarter 2020 results on Jan 27. It has an Earnings ESP of +10.34% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

TE Connectivity Ltd. (TEL - Free Report) is scheduled to release first-quarter fiscal 2021 results on Jan 27. The company has an Earnings ESP of +1.10% and carries a Zacks Rank #2.

Danaher Corporation (DHR - Free Report) has an Earnings ESP of +5.87% and a Zacks Rank of 2. The company is set to report fourth-quarter 2020 results on Jan 28.

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