Corning
stock is trading sharply lower Tuesday after the specialty glass manufacturer posted a softer-than-expected September quarter, and provided guidance that fell short of Street estimates. The company continues to see weakness in most of its primary business segments, including glass for large-screen televisions and fiberoptic-communications infrastructure.
Corning stock (ticker: GLW) is 4% lower to $25.85.
For the third quarter, Corning posted “core” sales of $3.5 billion, in line with estimates, off 1% sequentially, and down 6% from a year ago. Under generally accepted accounting principles, sales were $3.2 billion, down 9%. Adjusted profits were 45 cents a share, two pennies below the Street consensus, matching the second-quarter level. (The company’s guidance had called for a slight improvement on a sequential basis which did not materialize.) On a GAAP basis, Corning earned 19 cents a share.
“Our markets continue to reflect demand below trend lines, but our sales will recover, and we will return to growth,” Corning CEO Wendell Weeks said in a statement. “In the meantime, we will continue to improve our profitability and cash flow, even in this current muted sales environment. As a result, as our markets recover to trend, we can serve them with our existing capacity and capabilities on an improved price and cost platform. This will allow us to grow profitability faster than sales and generate significant incremental cash flow.”
For the fourth quarter, the company projects core sales of $3.25 billion, with core earnings per share of 37 cents to 42 cents, well below the Street consensus at 50 cents.
Sales in the company’s optical-communications segment were $918 million, down 30% sequentially, amid “lower order rates from carriers.” That is consistent with recently weak results from other suppliers to telecommunications providers. Corning said display-tech sales, mostly TV-display glass, were up 42% from a year ago to $972 million, but that “volume was lower than expected.”
Corning said its specialty materials segment, including smartphone cover glass, had sales of $563 million, up 8%, driven by higher sales of Gorilla Glass “resulting from customer product launches in the quarter,” which apparently includes the
Apple
(AAPL) iPhone 15.
The company’s environmental-tech business had sales of $449 million, up 6%, while its life sciences sales fell 26% to $230 million, on lower demand for Covid-related products in China and customers drawing down inventory.
Write to Eric J. Savitz at [email protected]
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