We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Corning (GLW) Up 5.2% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Corning (GLW - Free Report) . Shares have added about 5.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Corning due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Corning Q3 Earnings Miss Estimates on Lower Demand
Corning reported soft third-quarter 2023 results, wherein both the top and bottom lines fell short of the respective Zacks Consensus Estimate. The company witnessed a top-line contraction year over year, owing to weakness in several business segments. Weak demand trends from carriers in Optical Communications and declining demand for COVID-related products in the Life Science segment primarily induced the year-over-year sales drop. However, healthy traction in Display technologies, rising demand for semiconductor materials and Gorilla Glass products partially cushioned the top line.
Net Income
Quarterly GAAP net income was $164 million or 19 cents per share compared with $208 million or 24 cents per share in the year-ago quarter. Lower net sales led to a year-over-year decline.
Core earnings were recorded at $386 million or 45 cents per share, down from $438 million or 51 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by a penny.
Revenues
Net sales on a GAAP basis declined to $3,173 million from $3,488 million reported in the year-ago quarter. Declining revenues in several verticals, including Optical Communications and Life Science impeded the top-line growth during the quarter. Core sales were down 6% to $3,459 million. The top line missed the consensus estimate of $3,502 million.
Segment Results
Optical Communications generated $918 million in revenues, down 30% from $1,317 million in the year-ago quarter. The top line fell short of our revenue estimate of $1,028 million. Net income from this segment declined to $91 million from $183 million reported in the year-ago quarter. Sales in the quarter were affected by reduced order rates from carriers.
Display Technologies registered $972 million in revenues, up 42% year over year. Net sales missed our revenue estimate of $1025.9 million. The segment’s net income was $242 million compared with the prior-year quarter’s tally of $134 million. The sharp 81% increase in net income was mainly driven by price hikes. Despite sales growth, the volume was lower than management’s expectations.
Net sales from Specialty Materials stood at $563 million, up 8% year over year. The top line marginally surpassed our estimate of $467.7 million. Strong demand for semiconductor materials and greater sales of Gorilla Glass induced by customer product launches were key growth drivers for this segment. Net income was $72 million, up from $33 million reported in the prior-year quarter.
Environmental Technologies contributed $449 million in net sales, up from $425 million in the year-ago quarter. Positive momentum for gasoline particulate filters in China supported the gain from this segment. However, weakness in heavy-duty markets in North America partially reversed this trend. Net income was $99 million, up from $87 million in the year-earlier quarter, driven by various productivity enhancement initiatives.
Revenues from the Life Sciences segment declined to $230 million from the year-earlier quarter’s figure of $312 million. Segment net income was $13 million compared with $43 million in the year-ago quarter. Declining demand trends for COVID-related products in China and inventory adjustments affected the top line from this segment.
Hemlock and Emerging Growth Businesses reported a 20% decline in net sales year over year to $327 million. The company reported a net loss of $8 million from this segment against a net income of $18 million in the year-ago quarter. Lower sales in Corning Pharmaceutical Technologies and the decreasing price of solar polysilicon impacted the top line.
Other Details
Quarterly gross profit decreased to $1,004 million from $1,062 million, with respective margins of 31.6% and 30.4%. Operating income was $236 million, down from $292 million in the prior-year quarter. Core gross margin was 37%, up from 36.1% in the year-ago quarter, owing to various productivity and pricing improvement actions across business operations.
Cash Flow & Liquidity
During the September quarter, Corning generated $722 million of net cash from operating activities compared with $706 million in the year-earlier quarter. The company registered a free cash flow of $466 million compared with the prior year’s figure of $255 million.
As of Sep 30, 2023, Corning had $1,639 million in cash in cash and cash equivalents with $7,210 million of long-term debt.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -18.29% due to these changes.
VGM Scores
At this time, Corning has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Corning has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Corning (GLW) Up 5.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Corning (GLW - Free Report) . Shares have added about 5.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Corning due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Corning Q3 Earnings Miss Estimates on Lower Demand
Corning reported soft third-quarter 2023 results, wherein both the top and bottom lines fell short of the respective Zacks Consensus Estimate. The company witnessed a top-line contraction year over year, owing to weakness in several business segments. Weak demand trends from carriers in Optical Communications and declining demand for COVID-related products in the Life Science segment primarily induced the year-over-year sales drop. However, healthy traction in Display technologies, rising demand for semiconductor materials and Gorilla Glass products partially cushioned the top line.
Net Income
Quarterly GAAP net income was $164 million or 19 cents per share compared with $208 million or 24 cents per share in the year-ago quarter. Lower net sales led to a year-over-year decline.
Core earnings were recorded at $386 million or 45 cents per share, down from $438 million or 51 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate by a penny.
Revenues
Net sales on a GAAP basis declined to $3,173 million from $3,488 million reported in the year-ago quarter. Declining revenues in several verticals, including Optical Communications and Life Science impeded the top-line growth during the quarter. Core sales were down 6% to $3,459 million. The top line missed the consensus estimate of $3,502 million.
Segment Results
Optical Communications generated $918 million in revenues, down 30% from $1,317 million in the year-ago quarter. The top line fell short of our revenue estimate of $1,028 million. Net income from this segment declined to $91 million from $183 million reported in the year-ago quarter. Sales in the quarter were affected by reduced order rates from carriers.
Display Technologies registered $972 million in revenues, up 42% year over year. Net sales missed our revenue estimate of $1025.9 million. The segment’s net income was $242 million compared with the prior-year quarter’s tally of $134 million. The sharp 81% increase in net income was mainly driven by price hikes. Despite sales growth, the volume was lower than management’s expectations.
Net sales from Specialty Materials stood at $563 million, up 8% year over year. The top line marginally surpassed our estimate of $467.7 million. Strong demand for semiconductor materials and greater sales of Gorilla Glass induced by customer product launches were key growth drivers for this segment. Net income was $72 million, up from $33 million reported in the prior-year quarter.
Environmental Technologies contributed $449 million in net sales, up from $425 million in the year-ago quarter. Positive momentum for gasoline particulate filters in China supported the gain from this segment. However, weakness in heavy-duty markets in North America partially reversed this trend. Net income was $99 million, up from $87 million in the year-earlier quarter, driven by various productivity enhancement initiatives.
Revenues from the Life Sciences segment declined to $230 million from the year-earlier quarter’s figure of $312 million. Segment net income was $13 million compared with $43 million in the year-ago quarter. Declining demand trends for COVID-related products in China and inventory adjustments affected the top line from this segment.
Hemlock and Emerging Growth Businesses reported a 20% decline in net sales year over year to $327 million. The company reported a net loss of $8 million from this segment against a net income of $18 million in the year-ago quarter. Lower sales in Corning Pharmaceutical Technologies and the decreasing price of solar polysilicon impacted the top line.
Other Details
Quarterly gross profit decreased to $1,004 million from $1,062 million, with respective margins of 31.6% and 30.4%. Operating income was $236 million, down from $292 million in the prior-year quarter. Core gross margin was 37%, up from 36.1% in the year-ago quarter, owing to various productivity and pricing improvement actions across business operations.
Cash Flow & Liquidity
During the September quarter, Corning generated $722 million of net cash from operating activities compared with $706 million in the year-earlier quarter. The company registered a free cash flow of $466 million compared with the prior year’s figure of $255 million.
As of Sep 30, 2023, Corning had $1,639 million in cash in cash and cash equivalents with $7,210 million of long-term debt.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -18.29% due to these changes.
VGM Scores
At this time, Corning has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Corning has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.