Back to top

Image: Bigstock

Will Higher Revenues Boost Corning's (GLW) Q2 Earnings?

Read MoreHide Full Article

Corning Incorporated (GLW - Free Report) is scheduled to report second-quarter 2021 results on Jul 27, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 7.1%. It pulled off a trailing four-quarter earnings surprise of 39%, on average.

The company is expected to have recorded year-over-year higher aggregate revenues in the second quarter. The performance can be attributed to strong demand and positive momentum across its businesses.

Factors at Play

During the quarter, Corning repurchased 35 million shares from Samsung Display, which resulted in the latter having a stake of about 9%. The transaction improved Corning’s capital structure and is expected to have been accretive to its earnings per share.

Corning introduced SMF-28 Contour optical fiber to help telecom operators address the growing number of connected devices, 5G network build-outs and advances in cloud computing. The product allows customers to seamlessly upgrade their optical infrastructure. This is likely to be positively reflected in its upcoming results.

The Zacks Consensus Estimate for the Optical Communications segment’s net sales is pegged at $977 million. The figure indicates a rise of 10.1% from the year-ago quarter’s reported figure. The higher projection reflects accelerated pace of data center builds, network capacity expansion and fiber-to-the-home projects.

The consensus estimate for Display Technologies sales is $880 million, which indicates a rise of 16.9% year over year. The performance is likely to have been driven by an increase in glass volume.

The consensus estimate for Specialty Materials sales is $528 million, which indicates growth of 26.6% year over year. The performance is likely to have been driven by solid demand for premium cover materials, strength in the IT market and the growing importance of semiconductor-related optical glasses.

The consensus estimate for Environmental Technologies sales is pegged at $460 million, which suggests growth of 103.5%. This reflects improving markets and more Corning content, along with higher diesel sales, driven by demand in China and North America.

The consensus estimate for Life Sciences sales stands at $297 million, which implies an increase from $243 million reported a year ago. This reflects strong demand across all regions, recovery in academic and pharmaceutical research labs and demand for bioproduction products and diagnostic-related consumables.

For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $3,403 million, which indicates growth of 31.5% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 51 cents, which suggests an increase of 104%.

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 51 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 #3.

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:

Boyd Gaming Corporation (BYD - Free Report) is slated to release second-quarter 2021 results on Jul 27. It has an Earnings ESP of +54.29% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Cheesecake Factory Incorporated (CAKE - Free Report) is scheduled to release second-quarter 2021 results on Jul 27. The company has an Earnings ESP of +8.18% and a Zacks Rank #1.

Matador Resources Company (MTDR - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #1. The company is set to report second-quarter 2021 results on Jul 27.