Corning, the specialty glass maker, is experiencing a boost in its stock as its display glass business continues to thrive, compensating for the weakness in optical networking.
Financial Results
In the June quarter, Corning reported “core” sales of $3.48 billion, showing a sequential increase of 3%. However, this was a 7% drop from the previous year. Nonetheless, it aligned perfectly with the Street consensus forecast of $3.48 billion. Additionally, the company’s core profits stood at 45 cents per share, down from 57 cents per share a year ago, just falling short of the Street consensus at 46 cents per share.
Strong Growth in Display Technologies Segment
Corning’s optical communications sector faced challenges with sales of $1.1 billion, declining by 5% sequentially and 19% from a year ago. This decline was attributed to weak demand for passive optical network products. However, their Display Technologies segment experienced significant improvement. The segment generated revenue of $927 million, marking a 6% increase from the previous year and a substantial 22% increase from the March quarter. This surge was primarily driven by higher glass demand from flat-panel display companies.
Overall Performance
Under generally accepted accounting principles, Corning’s sales were reported as $3.2 billion, reflecting a 10% decrease from the same quarter of the previous year. However, there was a 2% increase sequentially. Similarly, GAAP profits took a hit, standing at 33 cents per share and seeing a significant drop of 50% in comparison to the previous year.
Overall, Corning’s success in its display glass business has successfully offset the challenges faced in its optical networking sector. With an impressive performance in the Display Technologies segment, the company continues to make strides in the market.
Corning Reports Mixed Results for Q2 2021
Corning, a leading manufacturer of pollution-control products and vaccine vials, released its second-quarter earnings report, showcasing a mixed performance across its segments.
Environmental Technologies Segment Sees Strong Sales Growth
Corning’s Environmental Technologies segment, responsible for producing pollution-control products primarily for automakers, experienced a significant sales increase. Sequentially, sales jumped by 6%, while there was an impressive 28% growth compared to the same period last year. The company attributed this success to the surge in gasoline particulate filter sales in China, driven by new regulations.
Decreased Revenue for the Life Sciences Segment
Unfortunately, Corning’s Life Sciences segment, which focuses on manufacturing vaccine vials, faced a decline in revenue. Sales were down by 10% sequentially and 26% year-on-year. Management cited reduced demand for Covid-related products in China and customers’ ongoing efforts to minimize their inventories.
CEO Optimistic About the Future
Despite the challenges faced by the Life Sciences segment, CEO Wendell Weeks expressed confidence in the company’s overall performance. He highlighted the progress made in improving profitability and cash flow, even in the current weak end-market environment. Weeks emphasized the company’s commitment to further enhancing profitability and cash flow and expressed optimism about strong operating leverage once market conditions recover.
Q3 Projections
Looking ahead, Corning forecasts core sales of approximately $3.5 billion for the September quarter. Although slightly lower than the Street consensus of $3.7 billion, the company expects core earnings per share (EPS) to be equal to or potentially exceed the 45 cents reported in the previous quarter. The Wall Street consensus estimate for EPS was 53 cents.
Market Perception and Share Performance
Corning’s stocks showed positive movement following the release of its earnings report. As of Tuesday, shares were up 2.5% at $33.99.