Samsung investing in Corning, new $2B buyback announced; shares soar

Corning (GLW) is taking full control of the Samsung Corning LCD glass JV, currently 43%-owned by Samsung Display. Samsung, meanwhile, is buying $2.3B worth of Corning convertible preferred shares via two transactions.

The deal will give Samsung Display a 7.4% stake in Corning on an as-converted basis. It also features a new display glass supply agreement between the firms that lasts until 2023, and a strengthening of their R&D collaboration.

The transactions are expected to close in Q1 2014. Corning promises "immediate earnings accretion" and cost synergies.

Separately, Corning has announced a new $2B buyback, good for repurchasing 7% of outstanding shares at current levels.

The company also says it expects to report Q3 revenue of $2.1B (+10% Y/Y) and EPS of $0.33 vs. a consensus of $2.1B and $0.32. Q4 numbers are expected to be lower Q/Q, due to seasonality and a major Y/Y drop in optical fiber sales. The consensus is for revenue of $2.11B and EPS of $0.33.

Full Q3 results arrive on Oct. 30.

GLW +20.7% AH. CC at 4:30PM ET.

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Comments (20)
  • financeminister
    , contributor
    Comments (1230) | Send Message
    Seriously? GLW was on my watchlist and I was evaluating this company.... and then I decided not to start a position as it might be a value trap. Nice.
    22 Oct 2013, 04:35 PM Reply Like
  • vmetla
    , contributor
    Comments (69) | Send Message
    I did the same. I sold all my holdings last year at around 14ish.
    22 Oct 2013, 04:40 PM Reply Like
  • Chris Lau
    , contributor
    Comments (4284) | Send Message
    Kudos to the SA author who wrote a PRO piece on GLW, calling shares 50% undervalued.
    22 Oct 2013, 04:54 PM Reply Like
  • Get a Dog
    , contributor
    Comments (210) | Send Message
    This is going to take more research. I wouldn't jump blindly into it.


    Quoting from that article:
    "Everybody knows that Samsung Corning Precision Materials (the LCD monitor business) is a slowly dying business and nobody understands that better than Corning themselves, which is why they're investing in these intriguing new types of glass displays."


    This "dying JV" is the one that Corning is buying total control of here!


    Also check out that Thomas-Reuters report linked under "buying $2.3B" in the link above. It's got some really interesting things in it. Given the sequence of purchases and (possible share prices at time) this could still lead to significant dilution even with the buyback.
    This is great for the current longs (Congratulations... wish I would have bought when I looked at it six months ago at $13.13...) But I'm not jumping on in the morning, I'd suggest doing some serious DD first.
    23 Oct 2013, 02:07 AM Reply Like
  • ekin09
    , contributor
    Comments (192) | Send Message
    Wow, I did the same as above. I am shocked and happy for those who hung on.
    22 Oct 2013, 05:20 PM Reply Like
  • mikeurl
    , contributor
    Comments (859) | Send Message
    I stepped out of GLW a long time ago because I thought they'd need years to adjust to the lower margins in big glass. But they've recovered already for the most part. It certainly looked like a value trap but their other divisions are really stepping up and the specialty glass is finally starting to live up to the hype.
    22 Oct 2013, 05:45 PM Reply Like
  • gkom8
    , contributor
    Comments (116) | Send Message
    same here. you think its too late now?
    22 Oct 2013, 06:05 PM Reply Like
  • jasonhad
    , contributor
    Comments (104) | Send Message
    Interesting how the various houses were falling all over themselves calling GLW "market perform" and worse in the past two weeks or so. Corning management has proven itself innovative, consistent and shareholder-friendly, without taking eyes off the market, r&d, and internal operations. Patient investors are smiling as the traders rue missing the boat.
    22 Oct 2013, 06:06 PM Reply Like
  • johnproto
    , contributor
    Comments (38) | Send Message
    Where was the NSA when we needed them? I've been seriously considering this stock too! Any opinions on a new target?
    22 Oct 2013, 06:06 PM Reply Like
  • alex488sport
    , contributor
    Comment (1) | Send Message
    I opened @15.0 just two weeks ago! Great company! Nice gain!
    22 Oct 2013, 06:07 PM Reply Like
  • toddro
    , contributor
    Comments (227) | Send Message
    GLW appeared on my value screen in late August and I liked the numbers, but I did not really like what I was reading about mgmt in some articles. Then I read this Yahoo article, researched the company some more, and it proved to be the catalyst toward solidifying my position under 14.50. Long GLW.

    22 Oct 2013, 06:17 PM Reply Like
  • DGI_Dan
    , contributor
    Comments (88) | Send Message
    Earlier this year, $GLW looked like a value trap but dividend was good. With this new buyback and new cash infusion from Samsung, I think GLW is looking good for future. Long GLW under 12.50.
    22 Oct 2013, 07:00 PM Reply Like
  • Walter P. Chrysler
    , contributor
    Comments (300) | Send Message
    This could be the start of a "Korean Invasion"...who knows. There are a lot of nuggets in the physical location of Corning worth gobbling up...copper, silver, steel, analog devices, film...all in theory worth a ton of money vis a vis "the Digital Dictatorship." I just got a catalog hocking old McIntosh receivers with vacuum tubes...12000 bucks of course. With the dollar so weak though that's a steal in some quarters. And yes...people do pay for purely analog (the return of simple film cameras while physically creating the picture in a dark room is another interesting "Back to the Future" investing thesis. it will be interesting to see if this is one off or the start of something big.
    22 Oct 2013, 07:50 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4208) | Send Message
    Lol, I also dumped the value trap. Yeah. P/E is still very low - even after 25%+
    22 Oct 2013, 10:59 PM Reply Like
  • Neodean
    , contributor
    Comments (8) | Send Message
    I'm thrilled. Fortunate to have built a position in recent weeks. Expect some profit taking after the jump, but there is momentum building here. I'm holding on to this one for a while. It's not too late to buy in.
    22 Oct 2013, 11:07 PM Reply Like
  • dhpetrescu
    , contributor
    Comments (71) | Send Message
    Great news. I started a 2015 out of the money call position earlier this year. I was a bit worried I was prepared to wait a very long time to get in the money but it finally made it after hours.
    23 Oct 2013, 12:03 AM Reply Like
  • steve4466
    , contributor
    Comments (170) | Send Message
    Pleased with the gain on my small GLW position, and the Q3 figures are good too. But strategically this seems to move the company in the opposite direction to where I thought they were heading. It makes them even more concentrated in display, after they said they wanted to build up the other segments to achieve greater diversification. I trust the management, however. Perhaps it would now become more viable to split off the non-display businesses because they are even further away from achieving a balanced portfolio. The y/y weakness in optic fiber is news too, management previously said that all non-display segments were growing.I will continue to hold.
    23 Oct 2013, 02:25 AM Reply Like
  • Randal James
    , contributor
    Comments (4422) | Send Message
    Interesting. Google buys a piece of INVN so they can be certain of enough of the specialized 'glass' to make Google Glass. GLW looks potentially weak because Gorilla Glass might be replaced by a sapphire laminate glass that will be break resistant. Yet Samsung blows all this off and buys a piece of GLW. I wonder what else was in their sample kit?
    23 Oct 2013, 05:17 AM Reply Like
  • kellan
    , contributor
    Comments (144) | Send Message
    Samsung very smart! Now Apple buying glass from Samsung!
    22 Oct 2014, 07:29 AM Reply Like
  • Sand
    , contributor
    Comments (16) | Send Message
    Good things happen when you buy and hold value.
    23 Oct 2013, 10:30 AM Reply Like
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