Corning (NYSE:GLW) has been one of biggest laggards in my portfolio over the last six months. It offers a compelling valuation and a solid dividend, but has done nothing over the last half year. However, it came in with a better than expected earnings report Wednesday and finally looks ready to move forward. Key earnings highlights for Corning:
- Earnings came in at 30 cents a share, beating estimates by two pennies.
- Revenues came in $50mm above expectations.
- The company's CFO came out and stated that he expects LCD glass price declines to moderate in the next quarter versus the last two quarters.
- Both the Telecommunications and Specialty Materials business are expected to grow revenues at a 10% to 15% going forward.
4 additional reasons Corning has solid upside from just over $13 a share:
- It has a rock solid balance sheet with over $3.5B in net cash (over 15% of market capitalization) and provides a yield of 2.3%.
- The stock has a forward PE of under 9, below its historical average of around 12 times forward earnings.
- The 20 analysts that cover the stock is $16 a share. Corning is selling for less than 7 times operating cash flow as well. It increased OCF by approximately 60% from FY2009 to FY2011.
- The stock has spent the last six months building a technical support base right under current levels (see chart).
Disclosure: I am long GLW.