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Corning Q3 Earnings Beat on Solid Growth in Optical Communications
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Corning Incorporated (GLW - Free Report) reported impressive third-quarter 2024 results, wherein both the top line and bottom line surpassed the respective Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy demand in the Optical Communications and Life Sciences segments.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The growing adoption of new optical connectivity products for generative AI is a tailwind. Solid growth in free cash flow is a positive.
Net Income
On a GAAP basis, the company reported a net loss of $117 million or a loss of 14 cents per share against a net income of $164 million or 19 cents per share in the year-ago quarter. Higher cost of sales and increase in operating expenses impeded the net income during the quarter.
Core earnings were $465 million or 54 cents per share, up from $386 million or 45 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 2 cents.
Corning Incorporated Price, Consensus and EPS Surprise
Net sales, on a GAAP basis, were $3.39 billion, up from $3.17 billion reported in the year-ago quarter. Solid traction in several verticals boosted net sales. Core sales were up 8% to $3.73 billion. The top line beat the consensus estimate of $3.7 billion.
Segment Results
Optical Communications generated $1.24 billion in revenues, up 36% from $918 million in the year-ago quarter. The top line beat our estimate of $1.11 billion. Net income from this segment improved to $175 million from $91 million reported in the year-ago quarter. Solid demand for new optical connectivity products for generative AI applications propelled net sales in the Enterprise vertical of this segment.
Display Technologies registered $1.01 billion in revenues, up 4% year over year. Net sales missed our revenue estimate of $1.03 billion. The segment’s net income was $285 million compared with the prior-year quarter’s figure of $242 million. The company’s strategy of price hikes supported the top line.
Net sales from Specialty Materials stood at $548 million, down 3% year over year. However, demand for premium glass for mobile devices remains strong. The top line missed our estimate of $566.6 million. Net income was $72 million, matching prior-year quarter's tally.
Environmental Technologies contributed $382 million in net sales, down from $449 million in the year-ago quarter. The downturn is primarily attributed to lower sales of Class 8 trucks in North America. Net sales fell short of our revenue estimate of $437.9 million.
Revenues from the Life Sciences segment were $244 million compared with the year-earlier quarter’s figure of $230 million, up 6% year over year. Segment net income was $15 million, up 15% year over year.
Hemlock and Emerging Growth Businesses reported a 9% decline in net sales year over year to $298 million. The company reported a net loss of $12 million compared with a net loss of $8 million in the year-ago quarter.
Other Details
Quarterly gross profit increased to $1.13 billion from $1 billion, with respective margins of 33.5% and 31.6%. Operating income was $302 million, up from $236 million in the prior-year quarter. Core gross margin was 39.2%, up from 37% 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 $699 million of net cash from operations compared to a cash flow of $722 million in the year-earlier quarter. As of Sept. 30, 2024, the company had $1.61 billion in cash in cash and cash equivalents with $7.07 billion of long-term debt.
Outlook
For the third quarter of 2024, core sales are estimated at $3.75 billion. Core EPS is projected to be in the range of 53-57 cents.
In the last reported quarter, it delivered an earnings surprise of 8.25%. ANET is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank of 2 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.
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Corning Q3 Earnings Beat on Solid Growth in Optical Communications
Corning Incorporated (GLW - Free Report) reported impressive third-quarter 2024 results, wherein both the top line and bottom line surpassed the respective Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy demand in the Optical Communications and Life Sciences segments.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The growing adoption of new optical connectivity products for generative AI is a tailwind. Solid growth in free cash flow is a positive.
Net Income
On a GAAP basis, the company reported a net loss of $117 million or a loss of 14 cents per share against a net income of $164 million or 19 cents per share in the year-ago quarter. Higher cost of sales and increase in operating expenses impeded the net income during the quarter.
Core earnings were $465 million or 54 cents per share, up from $386 million or 45 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 2 cents.
Corning Incorporated Price, Consensus and EPS Surprise
Corning Incorporated price-consensus-eps-surprise-chart | Corning Incorporated Quote
Revenues
Net sales, on a GAAP basis, were $3.39 billion, up from $3.17 billion reported in the year-ago quarter. Solid traction in several verticals boosted net sales. Core sales were up 8% to $3.73 billion. The top line beat the consensus estimate of $3.7 billion.
Segment Results
Optical Communications generated $1.24 billion in revenues, up 36% from $918 million in the year-ago quarter. The top line beat our estimate of $1.11 billion. Net income from this segment improved to $175 million from $91 million reported in the year-ago quarter. Solid demand for new optical connectivity products for generative AI applications propelled net sales in the Enterprise vertical of this segment.
Display Technologies registered $1.01 billion in revenues, up 4% year over year. Net sales missed our revenue estimate of $1.03 billion. The segment’s net income was $285 million compared with the prior-year quarter’s figure of $242 million. The company’s strategy of price hikes supported the top line.
Net sales from Specialty Materials stood at $548 million, down 3% year over year. However, demand for premium glass for mobile devices remains strong. The top line missed our estimate of $566.6 million. Net income was $72 million, matching prior-year quarter's tally.
Environmental Technologies contributed $382 million in net sales, down from $449 million in the year-ago quarter. The downturn is primarily attributed to lower sales of Class 8 trucks in North America. Net sales fell short of our revenue estimate of $437.9 million.
Revenues from the Life Sciences segment were $244 million compared with the year-earlier quarter’s figure of $230 million, up 6% year over year. Segment net income was $15 million, up 15% year over year.
Hemlock and Emerging Growth Businesses reported a 9% decline in net sales year over year to $298 million. The company reported a net loss of $12 million compared with a net loss of $8 million in the year-ago quarter.
Other Details
Quarterly gross profit increased to $1.13 billion from $1 billion, with respective margins of 33.5% and 31.6%. Operating income was $302 million, up from $236 million in the prior-year quarter. Core gross margin was 39.2%, up from 37% 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 $699 million of net cash from operations compared to a cash flow of $722 million in the year-earlier quarter. As of Sept. 30, 2024, the company had $1.61 billion in cash in cash and cash equivalents with $7.07 billion of long-term debt.
Outlook
For the third quarter of 2024, core sales are estimated at $3.75 billion. Core EPS is projected to be in the range of 53-57 cents.
Zacks Rank & Stocks to Consider
Corning currently carries a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last reported quarter, it delivered an earnings surprise of 8.25%. ANET is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank of 2 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.