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Corning (GLW) Down 1.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Corning (GLW - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Corning due for a breakout? 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 Beats on Q1 Earnings, Expects Growth to Continue
Corning 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 8.94% due to these changes.
VGM Scores
Currently, Corning has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Corning has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Corning (GLW) Down 1.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Corning (GLW - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Corning due for a breakout? 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 Beats on Q1 Earnings, Expects Growth to Continue
Corning 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 8.94% due to these changes.
VGM Scores
Currently, Corning has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Corning has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.