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Corning (GLW) Beats on Q1 Earnings, Expects Growth to Continue
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Corning Incorporated (GLW - Free Report) reported solid first-quarter 2021 results, wherein both the top line and the bottom line beat the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income in the March quarter was $599 million or 67 cents per share against net loss of $96 million or loss of 16 cents per share in the prior-year quarter. The improvement primarily resulted from an operating income and a gain associated with the company’s currency-hedging contracts.
Core net income came in at $402 million or 45 cents per share compared with $177 million or 20 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Corning Incorporated Price, Consensus and EPS Surprise
Quarterly GAAP net sales increased 37.6% year over year to $3,290 million. Sales at all segments grew by double-digit percentages.
Core sales grew to $3,263 million from $2,529 million in the year-ago quarter. The top line surpassed the consensus estimate of $3,128 million.
Segment Results
Net sales in Optical Communications increased 18.5% year over year to $937 million. Sales grew in both enterprise and carrier networks, driven by the accelerated pace of data center builds, network capacity expansion and fiber-to-the-home projects. The segment’s net income was $111 million compared with $29 million in the prior-year quarter.
Net sales in Display Technologies were $863 million compared with $751 million in the prior-year quarter, led by an increase in glass volume. The segment’s net income was $213 million compared with $152 million in the year-ago quarter.
Specialty Materials’ net sales were up 28.1% year over year to $451 million. The rise was driven by solid demand for premium cover materials, strength in the IT market and the growing importance of semiconductor-related optical glasses. The segment’s net income was $91 million compared with $51 million in the prior-year quarter.
Environmental Technologies’ net sales grew 37.8% year over year to $441 million. This was a result of improving markets and more Corning content. Notably, diesel sales were up 44% driven by demand in China and North America. The segment’s net income was $74 million compared with $35 million in the prior-year quarter.
Net sales in Life Sciences were up 16.3% year over year to $300 million. This reflects strong demand across all regions, ongoing recovery in academic and pharmaceutical research labs and solid demand for bioproduction products and diagnostic-related consumables. The segment’s net income improved to $48 million from $38 million reported a year ago.
Other Details
Cost of sales increased 16.6% year over year to $2,134 million. Gross profit improved to $1,156 million from $561 million. Core gross profit was $1,167 million compared with $844 million recorded in the prior-year quarter, with respective margins of 35.8% and 33.4%. Operating income was $502 million, which improved from a loss of $121 million.
Cash Flow & Liquidity
During the first quarter of 2021, Corning generated $723 million of net cash from operating activities compared with $248 million in the prior-year quarter.
As of Mar 31, 2021, the company had $2,868 million in cash and cash equivalents with $7,650 million of long-term debt compared with the respective tallies of $2,672 million and $7,816 million at the end of the previous quarter.
Q2 Outlook
For the second quarter, Corning expects core sales in the range of $3.3 billion to $3.5 billion. Core earnings per share are estimated between 49 cents and 53 cents. The company anticipates strong demand and positive momentum across its businesses to continue throughout 2021.
Zacks Rank & Other Stocks to Consider
Corning currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B.
Micron delivered a trailing four-quarter earnings surprise of 6.5%, on average.
Western Digital delivered a trailing four-quarter earnings surprise of 10.9%, on average.
Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.
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Corning (GLW) Beats on Q1 Earnings, Expects Growth to Continue
Corning Incorporated (GLW - Free Report) reported solid first-quarter 2021 results, wherein both the top line and the bottom line beat the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income in the March quarter was $599 million or 67 cents per share against net loss of $96 million or loss of 16 cents per share in the prior-year quarter. The improvement primarily resulted from an operating income and a gain associated with the company’s currency-hedging contracts.
Core net income came in at $402 million or 45 cents per share compared with $177 million or 20 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Corning Incorporated Price, Consensus and EPS Surprise
Corning Incorporated price-consensus-eps-surprise-chart | Corning Incorporated Quote
Revenues
Quarterly GAAP net sales increased 37.6% year over year to $3,290 million. Sales at all segments grew by double-digit percentages.
Core sales grew to $3,263 million from $2,529 million in the year-ago quarter. The top line surpassed the consensus estimate of $3,128 million.
Segment Results
Net sales in Optical Communications increased 18.5% year over year to $937 million. Sales grew in both enterprise and carrier networks, driven by the accelerated pace of data center builds, network capacity expansion and fiber-to-the-home projects. The segment’s net income was $111 million compared with $29 million in the prior-year quarter.
Net sales in Display Technologies were $863 million compared with $751 million in the prior-year quarter, led by an increase in glass volume. The segment’s net income was $213 million compared with $152 million in the year-ago quarter.
Specialty Materials’ net sales were up 28.1% year over year to $451 million. The rise was driven by solid demand for premium cover materials, strength in the IT market and the growing importance of semiconductor-related optical glasses. The segment’s net income was $91 million compared with $51 million in the prior-year quarter.
Environmental Technologies’ net sales grew 37.8% year over year to $441 million. This was a result of improving markets and more Corning content. Notably, diesel sales were up 44% driven by demand in China and North America. The segment’s net income was $74 million compared with $35 million in the prior-year quarter.
Net sales in Life Sciences were up 16.3% year over year to $300 million. This reflects strong demand across all regions, ongoing recovery in academic and pharmaceutical research labs and solid demand for bioproduction products and diagnostic-related consumables. The segment’s net income improved to $48 million from $38 million reported a year ago.
Other Details
Cost of sales increased 16.6% year over year to $2,134 million. Gross profit improved to $1,156 million from $561 million. Core gross profit was $1,167 million compared with $844 million recorded in the prior-year quarter, with respective margins of 35.8% and 33.4%. Operating income was $502 million, which improved from a loss of $121 million.
Cash Flow & Liquidity
During the first quarter of 2021, Corning generated $723 million of net cash from operating activities compared with $248 million in the prior-year quarter.
As of Mar 31, 2021, the company had $2,868 million in cash and cash equivalents with $7,650 million of long-term debt compared with the respective tallies of $2,672 million and $7,816 million at the end of the previous quarter.
Q2 Outlook
For the second quarter, Corning expects core sales in the range of $3.3 billion to $3.5 billion. Core earnings per share are estimated between 49 cents and 53 cents. The company anticipates strong demand and positive momentum across its businesses to continue throughout 2021.
Zacks Rank & Other Stocks to Consider
Corning currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B.
Some other top-ranked stocks in the broader industry are Micron Technology (MU - Free Report) , Western Digital Corporation (WDC - Free Report) and Vicor Corporation (VICR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron delivered a trailing four-quarter earnings surprise of 6.5%, on average.
Western Digital delivered a trailing four-quarter earnings surprise of 10.9%, on average.
Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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