Corning Incorporated (GLW) on Q1 2021 Results - Earnings Call Transcript
Operator: Welcome to the Corning Incorporated Quarter 1 2021 Earnings Call. It is my pleasure to introduce you to Ann Nicholson, Vice President of Investor Relations. Ann Nicholson: Thank you, and good morning, everybody, and welcome to our first quarter 2021 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; Tony Tripeny, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer. I'd like to remind you that today's remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the company's financial reports. You should also note that we will be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business. For the first quarter, the largest difference between our GAAP and core results stemmed from noncash mark-to-market gains associated with the company's currency hedging contracts. Wendell Weeks: Thank you, Ann, and good morning, everyone. Today, we reported a strong start to what we expect to be an outstanding year. For the first quarter, we grew sales 29% year-over-year to $3.3 billion. We grew EPS by 125% to $0.44. Free cash flow of $372 million builds on the momentum we established in the second half of 2020. All five of our segments delivered double-digit sales and net income growth year-over-year, with sales growth rates ranging from 50% for display to 38% for environmental. But last year was an easy compare. So I think it's worth noting that total company sales are up 14% since the first quarter of 2019. No question, we're in a strong position. This morning, I want to take a closer look at how all our businesses are achieving key milestones and contributing to Corning's success. I'll frame my remarks around three points. First, invention is fundamental to our long-term strategy. Through our relentless commitment to R&D, we developed category-defining products to transform industries and enhance lives. Tony Tripeny: Thank you, and good morning, everyone. I am pleased to reiterate that Corning had another excellent quarter. We closed 2020 with strong momentum and built on that momentum by delivering sales, EPS and cash flow above our expectations. We are off to a great start, and we expect that strong demand and positive momentum to continue throughout the year. Now let me walk you through our first quarter performance. Sales were $3.3 billion, which translates to a year-over-year increase of 29%. We posted double-digit sales and net income growth year-over-year across all of our segments. Environmental Technologies and Specialty Materials delivered particularly strong year-over-year growth, posting sales increases of 38% and 28%, respectively, and net income gains of 111% and 78%, respectively. Optical Communications posted its second quarter of year-over-year growth, and we expect to see that trend continue. And notably, display experienced the most favorable first quarter pricing environment we’ve seen in more than a decade. During the quarter, multiple events disrupted global supply chains. Like many other companies, we experienced elevated freight and logistics costs across our businesses and we expedited shipments to meet our customers' expanding demand. This ultimately reduced profits by approximately $50 million. As a result, our margins were below normalized levels. This was most pronounced in our Environmental Technologies, Optical Communications and Display businesses. We will continue to do what it takes to deliver for our customers. But we'll also take steps to mitigate these costs, and we expect to see them begin to decline in the second quarter and normalize longer term. Operating margin was 17.1%. That's an improvement of 730 basis points on a year-over-year basis. We grew operating income of 125% year-over-year. EPS came in at $0.45, which is more than double year-over-year. Free cash flow of $372 million was up $691 million versus first quarter 2020, and it equates to 39% of our 2020 total. This adds to our confidence that we will generate significantly more free cash flow than 2020. So even with the disruptions from the Suez to storms, to continued COVID challenges, it was a very strong quarter. Now let's take a closer look at the performance of each of our businesses. In Display Technologies, first quarter sales were $863 million, up 3% sequentially and up 50% year-over-year. Net income was $213 million, up 40% year-over-year. Now net income declined slightly sequentially because of the timing and flows of incentives associated with expansions in China. Corning's volume grew by a low single-digit percentage sequentially and Q1 sequential prices remain consistent with Q4 levels. Now we continue to see strong in-market demand. Retail demand for large-sized TVs and IT products, including notebook PCs, are both on track for another year of double-digit growth. As a reminder, growth in large-sized TVs is the most important driver for us as we are well positioned to capture that growth with Gen 10.5, which is the most efficient gen size for large TV manufacturing. Panel makers are running at high utilizations, and glass demand is robust. And we continue to expect the glass market to grow by a mid-single-digit percentage in 2021. Against this backdrop, issues at our competitors have created glass shortages in an already tight supply environment. Our primary operational focus is to supply our customers' demand. Corning experienced the most favorable first quarter glass pricing environment in more than a decade. And we have increased cost in logistics, energy, raw materials and other operational expenses. As a result, we are moderately increasing glass prices in the second quarter. We believe the pricing environment will remain favorable going forward. Three factors will continue to drive this. First, we expect glass supply to remain short to tight in the upcoming quarters. Second, our competitors continue to face profitability challenges at current pricing levels. And third, display glass manufacturing requires periodic investments in existing capacity to maintain operations. Looking ahead, we expect that glass supply will continue to be short to tight, and we will continue to partner with our customers to maximize our glass supply. In Optical Communications, first quarter sales were $937 million, up 80% year-over-year. Sales were up in both enterprise and carrier networks driven by the accelerated pace of data center builds and increased capital spending on network capacity expansion and fiber-to-the-home projects. Net income was $111 million, up 283%. The improvement was driven by incremental volume and strong cost performance. There are some extremely encouraging announcements coming from leading network operators as well as governments around the world that point to the start of a strong investment phase across the industry. Clearly, there is a lot of excitement surrounding network deployment and optical fiber's role in delivering both basic and next-generation services to end customers. We are well positioned to capture a significant amount of that upside in the market. Corning is the industry leader and the only large-scale end-to-end manufacturer of optical solutions, which allows us to innovate on important dimensions not available to competitors. This puts us squarely at the center of growth trajectories in fiber-to-the-home, 5G and hyperscale data centers. We've returned to growth in Optical Communications, and we remain confident that we will continue to grow. In Environmental Technologies, first quarter sales were $441 million, up 38% year-over-year. Net income was $74 million, up 111% year-over-year. Diesel sales grew 44% year-over-year driven by customers continuing to adopt more advanced after-treatment in China and by a stronger-than-expected North America heavy-duty truck market. Automotive sales were up 34% year-over-year as the global auto market improved and GPF adoption continued in Europe and China. And we are well on our way and ahead of our original time frame to build a $500 million gas particulate filter business. European regulations are in full effect, and adoption in China continues as China's 6A implementation of the regulations began during the first quarter. In Specialty Materials, first quarter sales of $451 million were up 28% year-over-year due to strong demand for premium cover materials, strength in the IT market and demand for semiconductor-related optical glasses. Net income was $91 million, up 78% from 2020 as a result of higher sales volumes and lower manufacturing costs. Connectivity and computation continues to grow in importance, creating strength and resilience in the smartphone, IT and semiconductor markets. And we outperformed that strong market. Our premium glasses and surfaces supported new phones and IT launches, including more than 25 smartphones and 12 laptops and tablets featuring Gorilla Glass. And we are capturing high demand for our industry-leading advanced optics materials, which are essential for deep and extreme ultraviolet or EUV lithography.\ In 2020, EUV systems accounted for more than 30% of all semiconductor lithography equipment expenditures. Our customers believe these systems will grow significantly over the next five years. So we see growth for our semiconductor-related materials well beyond resolution of the current and well-publicized capacity tightness. Life Sciences first quarter sales were $300 million, up 16% year-over-year and 9% sequentially, driven by continued strong demand for diagnostics, growth in bioproduction and recovery in lab research markets. Net income was $48 million, up 26% year-over-year and 14% sequentially driven by the higher sales and solid operating performance. Now I'd like to turn to our commitment to financial stewardship and capital allocation. Our fundamental approach remains the same. We will continue to focus our portfolio and utilize our financial strength. We generate very strong operating cash flow, and we expect to continue going forward. We will continue to use our cash to grow, extend our leadership and reward shareholders. Our first priority for our use of cash is to invest in our growth and extend our leadership. We do this through RD&E investments, capital spending and strategic M&A. Our next priority is to return excess cash to shareholders in the form of dividends and opportunistic share repurchases. In February, we announced a 9% increase to our quarterly dividend. In April, share – we resumed share buybacks by repurchasing 4% of our outstanding common shares from Samsung display. We are pleased that Samsung will remain a significant shareholder. Their ownership demonstrates confidence in the value of Corning's capabilities, our ongoing technology collaborations and our combined innovation leadership. The repurchases will be immediately accretive to EPS starting in Q2. We will remain opportunistic during the year surrounding additional share repurchases. In closing, we had an excellent quarter relative to both 2020 and in 2019. Demand is high across our businesses. Our more Corning strategy is working, and we are operating very well with all segments growing year-over-year. We are growing our top and bottom line and generating strong free cash flow. For the second quarter, we expect core sales of $3.3 billion to $3.5 billion and earnings per share of $0.49 to $0.53. And for the rest of the year, we expect that momentum to continue. I look forward to sharing our progress with you as the year goes on. With that, let’s move to Q&A. Ann? Ann Nicholson: Thank you, Tony. Operator, we are ready for the first question. Operator: Thank you. Our first question comes from Steven Fox with Fox Advisors. Your line is open. Steven Fox: Thanks. Good morning. And thanks for all the color on the call so far. Wendell, I was wondering if you can maybe put some perspective on the current optical cycle from two points. One is the differences maybe in the market served by region application versus prior cycles, where you're strong, where you maybe have opportunities? And secondly, your own innovation, what could drive better content for you, market outgrowth, et cetera. And then, Tony, just on the other sales line, can you maybe break that out a little bit and give us some color on what was in that this quarter? Thank you. Wendell Weeks: Thanks, Steven. In terms of this build cycle, I think the most interesting thing about it is how demanding it is? The nature of network builds is the big civil works projects, and they're big capital investments. And so they tend to be made with very long-term anticipation of growing demand. What's happened is during the pandemic, the networks sort of burn through their guardrail that they always tend to have. That was try to be about 18 months ahead of any demand. And so now you're feeling it. They're feeling the revenue opportunity even earlier as they build. So that provides a little more impetus. So that's like the first thing, I think, that's a little different than build cycles that you and I have seen in the past, Steven. There's much less on spec, more on, hey, the baseline demand has just moved up. There's more work from home. There's more need for bandwidth. There's more cloud. There's more – and it's here today. And so I think that's one thing. I think the second thing is our – the entry of fiber optics in a significant way into wireless. So historically in 4G systems or 3G, they've been relatively fiber-poor. They haven't been big consumers of fiber. But with 5G, those cells need to be so much closer to the consumer, to their customers. You need more densification, and that's driving a lot more glass into the wireless network. So it sort of put us in this position, Steven, where sort of like whichever network wins or whichever network, they tend to emphasize, it will be glass-rich. Now if that wasn't already more than you wanted to know, I think the third thing is that operators are building more converged networks. Especially the big folks used to run a wireless network separate from wireline, there would even be separation between what is aimed at consumers versus businesses. And now they're their very best returns were by putting in fixed glass networks and then being able to serve as many different offerings off the tip of that fiber. So in general, this has built a pretty good build case for the technology cycle continuing to move our way along with the build cycle. As you heard me say in the opening, one of the things we're doing when you sort of see that converged nature and you see more cloud is it's driving our innovation wheel to be able to find ways for people to install networks and have them be able to go in faster, less expensively and now greater using much less materials. And we have a whole suite of products that we're just starting to introduce that are going to help make this build cycle be a more effective investment for our customers. Tony Tripeny: And then, Steve, in terms of the other segment, sales were about $270 million, a couple of hundred million dollars over last year. Vast majority of those sales were from Hemlock. Hemlock had a strong quarter, but we also saw a little bit of an increase in both our auto glass and in our Ballard business on a year-over-year basis. Steven Fox: Great. Appreciate all the color. Thank you very much. Operator: Thank you. Our next question comes from Samik Chatterjee with JPMorgan. Your line is open. Samik Chatterjee: Hey, thanks for taking my question. It was just on display. I wanted to understand the difference relative to when you talk about retail demand being strong, you talked about double-digit growth. But for the glass market, you're talking about mid-single-digit demand. And that overall grass market outlook sounds very similar to what you've talked about in previous years despite a much stronger market this year. So is that really just a capacity constraint that's limiting the glass market demand? And does that push some demand into next year? I just wanted to better understand that difference. Thank you. Tony Tripeny: No, I think from an overall standpoint, you're right. I mean, we're expecting the demand this year to be similar to what's happened in past years. And that, of course, is really driven by what happens with large screen-sized TVs. And so what we're pointing out is how important, not only those are, but that's where we're seeing a lot of good demand. I think one of the other changes that have happened over the last couple of years is IT is also having stronger demand and what we've seen in the last couple of years. And given the work-from-home and study-from-home environment, we expect that to continue. So I mean, we expect our what really drives this market, as you know, Samik, is what happens from a screen size standpoint. We'd expect our screen size to be up in that 1.5 inch plus just like it has in the past, and that would drive that marketplace. The one thing I would note is the one market where demand isn't as strong from a TV standpoint is in China. And China hasn't been as strong in the last couple of years. And we would expect that to change over time. And when that changes, we do think that, that will be additional demand that isn't in the marketplace today. Whether that happens in the back half of this year or next year, we'll just have to wait to see. Wendell Weeks: Yes. And Samik, what you're basically noting, and I think it's an astute observation is that, that demand above sort of our normal screen size growth is getting met by a reduction in the value chain downstream of us. So your question of does that basically put more demand out into next year, that's a good one. It all depends on how that supply chain ends overall. But I think it's a very good observation. Samik Chatterjee: Okay. Thanks for the color. Thank you. Operator: Thank you. Our next question comes from Rod Hall with Goldman Sachs. Your line is open. Rod Hall: Yes, thanks for the question. I wanted to ask two, I suppose. One would be the inventory levels on TVs. I know that, Wendell, you talked just a second ago about the supply shortages and how that mix is with demand. I'm just curious, when you guys think the inventory levels out there will be back to something like a new normal, whatever that is? And then secondly, I wanted to ask on C-band auctions and the optical business, whether you've detected any delays in deployment of optical fiber around some of that C-band spectrum build out and 5G build out? Or do you think that the deployment of all that starts maybe this summer? Just kind of trying to figure out what the timing expectation for that optical demand, particularly in the U.S., is around C-band and 5G? Thanks. Tony Tripeny: So I think in terms of the TV inventory levels, as Wendell said, we did see significant demand last year. And that definitely and continue to see good demand in the first quarter. And that clearly is impacting what's happening from an inventory level standpoint. And that is where we're seeing the continued reduction in those areas. And whether that sorts itself out by the end of the year or into next year really depends on what level of demand continues on a going-forward basis and not only on these large-sized TVs and IT, but also on IT products and then whatever eventually happens from a standpoint in China also. Wendell Weeks: And on the C-band piece, I think just take your question divided in these two pieces. First, just look at the value that C-band auction, Rod, is one of the things I take away from that is the value of densification. Because the way you increase the returns on those relatively big amounts they spend on spectrum is you can spread it up. You can reuse the same basic spectrum as long as you increase the densification of your network and decrease the serving area of that particular spectrum. So I think it really provides powerful economic interest in sort of fiber-rich wireless networks over time. So I think that's good news. As far as the actual timing goes, because of the converged nature of the networks, I don't know off the top of my head, Rod. Let us check into it, and we'll get back to you if we have any deep insight, okay? Rod Hall: Great. Okay, thanks guys. Appreciate it. Operator: Thank you. Our next question comes from John Roberts with UBS. Your line is open. John Roberts: Thank you. Are any of the baby businesses in the other segment graduating to the adult segments anytime soon, say, auto glass or Valor Glass? Or when do you think those businesses grow up? Wendell Weeks: John, don’t make me laugh on my earnings call, but yes, I think that's an excellent question. We're arguing about just that. And when do they move fully into our map structures, our market access platforms, we're not quite ready to have them graduate yet. But it's – but we're in the midst of that exact dialogue, sir. Tony Tripeny: Yes. I mean, I think – as I said, we saw growth on a year-over-year basis in both of those businesses, and we feel good about that. And I think there's definite benefit of having them in the other segment in terms of the real focus that we get, but then we also leverage our market access platforms at the same time. So we will definitely continue to debate that internally. John Roberts: Okay. Thank you. Operator: Thank you. Our next question comes from Wamsi Mohan with Bank of America. Your line is open. Wamsi Mohan: Yes, thank you. Wendell, I was hoping you could talk more broadly about if the constraints in the semiconductor space are creating any particular challenges for Corning across its business lines? And if I could, Tony, could you talk about the gross margins in the quarter? I understood your comment around the $50 million headwind because of some of the increased logistical freight cost, synergy costs. But can you talk about why we're not seeing potentially better gross margins, given the pricing and volumes that you're seeing in display, in particular? And maybe underlying that, what is actually happening with like-for-like margins across the segments? Any color there would be helpful. Thank you. Wendell Weeks: First, cover that Tony. Tony Tripeny: Sure. I mean, Wamsi, as you know, our stated goal is to expand our operating margins and improve our return on invested capital. And the good news is we're doing just that. And we believe these results are very good. And we think operating margin is the right place to judge our profitability. And the reason we focus on it, it's where we're utilizing our focus portfolio to capture synergies across our businesses. And you saw this expansion in operating margin. You saw it in Q3 and Q4 last year on a year-over-year basis, and you see it again in Q1. Our Q1 operating margin 17.1%, which was up considerably from last year, and our operating margin in terms of dollars was up 125%. So I mean, this is good performance and in line with where we were actually from a pre-pandemic standpoint. But as you noted, it was also included 150 basis points of cost from the $50 million of freight and logistics cost. And when you adjust for that, then it's extremely strong performance from a margin standpoint. And the good news is these costs will start to decline in Q2. They're going to normalize longer-term. And as that happens, you'd expect to see continued expansions from a margin standpoint. Now one question we get a lot is, well, what does Hemlock do to our margins? And this is a really good example of why we think if you're going to judge our profitability, operating margins is the right place to judge it. Is it actually a drag on our gross margin percentage? On average, it's about 50 basis points. But in Q1 because we had a little bit stronger business in Hemlock, it was actually greater than that. But it is slightly accretive on an operating margin standpoint. And that's why we think it's important to think about things from an operating standpoint. So from where we sit, we think it was really good performance in Q1. And you'd expect to see improved profitability as we turn to a more normalized environment. Wamsi Mohan: Wendell, could you follow-up on the semi side? Wendell Weeks: Sure. It's definitely impacting auto, display and our Mobile Consumer Electronics industries. But really, in all three of those, our backlog has been strong enough that we're not feeling it in our sales. So we're watching it really closely. But so far, we're not – we're just not feeling it in our revenue, although we know that it is definitely impacting the industry like auto is or in IT. They can't get it up, but we're still growing really strongly into that. So more to come, we'll look at it closely. And any insights that you pick up along the way, we would appreciate as well, sir. Wamsi Mohan: Thanks, Wendell. Operator: Thank you. Our next question comes from Asiya Merchant with Citi. Your line is open. Asiya Merchant: Great. Thank you for the color, and thanks for all the incremental comments this far. I just have a couple of questions. One on CapEx. It came in a little bit shorter than what I was expecting. Should we expect this run rate to continue for the remainder of the year? Or was there any onetime this quarter? And then just the commentary so far on demand, backlog, order pipeline seems really strong. I know Corning did use to provide annual guidance or at least annual color across the various segments. Any reason why that's not the case this particular quarter? And should we expect that in the future quarters? Thanks you. Tony Tripeny: Yes. I think from a CapEx standpoint, what we said back in January is we thought CapEx would be pretty similar to what occurred in 2020. And we still think that's likely to be the case. As you noted, our demand is very strong. And so as we get out further into the year, is it possible we'd spend a little bit more CapEx in order to meet that demand? That's certainly always a possibility. But I think from an overall standpoint, where we were back in January is still the right place. And if for some reason that were to change in a big way, of course, that always comes with committed customer demand. And so that's a good thing. And then in terms of our full year guidance, I mean, clearly, we're very happy about the momentum that we've experienced in Q4 and in Q1. And as with the guide we gave, we expect to continue from a Q2 standpoint. There's just still a lot of uncertainty in the world and a lot of general uncertainty. And so we're very just focused right now on delivering in the near term and keeping that momentum going. Wendell Weeks: If I can just add to both, I think as you think about cash flow, CapEx and then our guide, fundamentally, our cash flow is really strong when we're not in a big build cycle. And that's what you're seeing right now as we are in to create and extend pieces of our value creation cycle. And you see it with our quarter one free cash flow conversion was 90%. And you should really expect this type of very powerful cash flow from us when we're not in a significant build cycle. It takes us about 18 months to get one of these big plants up, and then it takes us a while to fill it. We're now benefiting from the wisdom of our past build cycles. And so that's going to continue to be strong. On guidance, we've listened really closely to our investment communities. And what we've tried to do is – the feedback we've gotten is sort of what would be most valuable would be to move to the more macro sales and EPS level and to take it a quarter at a time for now. And then as we continue to progress under this method, if you or others have thoughts on how we could additionally improve our ability to communicate with investors, we'll be really open to it. So more conversation to come, and we look forward to your input. Asiya Merchant: Great. Thank you. Operator: Our next question comes from Martin Yang with Oppenheimer. Your line is open. Martin Yang: Yes, good morning. Thank you for taking my question. Wendell, can you maybe comment on where we are in the hyperscale data center investments? And maybe any additional color, comment on their action in the next 12 to 18 months will be appreciated. Thank you. Wendell Weeks: Great. So short version is they're increasing their investments in hyperscale really across the board. Our various folks are more vague versus more direct, right? But what you see is really across the board in hyper, folks are commenting that they are going to continue to increase their investment in data centers as they're going forward here in this year. So we're actually in a build cycle for them as well. Good news is we have the capacity. We're ready to go. And we're seeing that demand as you saw in quarter one, and we're going to continue to see it. And I'm really excited about some of our potential innovations in that space that will, once again, create that more Corning, more of our content, why we reduce hyperscale's carbon footprint. We reduce its cost and increase their ability to get them up fast. Martin Yang: Great. Thanks. Ann Nicholson: Operator, we’ll squeeze in one more question. Operator: Our last question comes from Tim Long with Barclays. Your line is open. Tim Long: Thank you. Thanks for getting me on to bell here. Two, if I could. Maybe, Tony, for you. Could you talk a little bit about operating expenses? I get the focus on op margin over gross margin. It looks like a pretty good number in Q1. How do we think about the cadence there, given you guys have done some refocusing on the OpEx side, but also we should start seeing some return to travel and things like that and incentive payments and whatnot? And then second, on the Life Sciences business, could you talk a little bit about – you've obviously had two really strong quarters there. Do you think there's been some pull-forward? Or do you think we're kind of at new higher levels for that business? Thank you. Tony Tripeny: Yes Tim, from an operating expense standpoint, you're right. We remain very focused on that during the pandemic. We took a lot of actions, which saved us roughly a couple of hundred million dollars during the year. And we've said all along that those costs return as we return to normal, and I would expect to continue to see those increase somewhat as we go into the second and to the third quarter. Kind of the historic operating expense percentages that we've had, I think that's where you're going to end up from an overtime standpoint. Clearly, we remain very focused on it, but I just – I do think that you do see increases as business goes up. But the thing to keep in mind is that, of course, with the leverage that we're getting from a margin standpoint that we'd expect our operating margins to go up, just like they experienced as we did on a year-over-year basis in Q1 and also as we saw in Q3 and Q4. And then from a Life Sciences standpoint, I think that this is an ongoing business level. I mean, this is strength that we've seen across our businesses. Our orders are actually very strong. Our backlog is strong. And I mean, this is a level of business that we'd expect going forward, and we expect to see continued growth in that business actually. Wendell Weeks: Yes. It's all – I think you're asking is because of the real crunch in the Life Sciences businesses, people are trying to react to everything that was needed for the pandemic. You do create some high variability in supply chains, and we'll experience some of that. But in general, because of where we're positioned with our products and our innovations, we're sort of going down the journey in Life Sciences. It looks a lot like our other market access platforms, where the areas that we've invested are going to grow faster than the underlying markets, and our innovations are going to lead to a more Corning story. And therefore, I believe we are in an elevated growth environment for Life Sciences going forward as our innovations just become more relevant to the secular trends in that industry. Tim Long: Okay. Thank you. Ann Nicholson: Thanks, Tim; thank you, Wendell. And thanks operator, thank you all for joining us this morning. Before we close, I wanted to let everyone know that we will attend the JPMorgan Virtual Tech and Internet Conference on May 26 and the Bernstein conference on June 2. Finally, a web replay of today's call will be available on our site starting later this morning. Once again, thanks for joining us. And operator, you can disconnect all lines. Operator: This concludes today's conference call. Thank you for participating, you may now disconnect.GLW Ratings Summary
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What to Expect From Corning Incorporated’s Upcoming Q3 Results?
Analysts at Oppenheimer provided their outlook on Corning Incorporated (NYSE:GLW) ahead of the upcoming Q3 results, taking a cautious view based on lower panel maker utilization and weak end-market demand for consumer electronics.
The analysts lowered their Q3 and 2022 EPS estimates from $0.54 and $2.25 to $0.50 and $2.15, respectively. They also slightly reduced growth assumptions for H2/22 for Optic Comm, Specialty, and Environmental to reflect a lack of meaningful market recovery.
The analysts expect management commentary to be incrementally more constructive regarding Display as LCD pricing and panel maker utilization likely find a near-term bottom in Q4/22. The analysts also slightly lowered their 2023 EPS from $2.48 to $2.42, based on a longer-than-expected market recovery in Display, Specialty, and Environmental. The analysts reiterated their Outperform rating and $44 price target on the company’s shares.
