Corning's Opportunity Is In The Lack Of Risk
Jeffrey Dow Jones • 70 Comments
Jeffrey Dow Jones • 70 Comments
Jul. 29, 2014, 7:31 AM
- Corning (NYSE:GLW): Q2 EPS of $0.37 misses by $0.01.
- Revenue of $2.58B (+27.7% Y/Y) beats by $50M.
Jul. 28, 2014, 5:30 PM
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Jun. 20, 2014, 4:05 PM
- Hoping to appeal to germ-conscious gadget buyers (and boost ASPs along the way), Corning (GLW +0.9%) has launched an antimicrobial version of Gorilla Glass.
- The glass relies on ionic silver to kill off bacteria that can gradually form on a well-used touchscreen. The solution is meant not only for mobile devices, but public touch-enabled systems such as kiosks.
- Corning's Specialty Materials sales (Gorilla Glass-driven) are expected to rise 20%-25% Q/Q in Q2, as an inventory overhang dissipates. But a competitive threat from sapphire cover glass looms on the horizon.
- Last year: Corning exec talks new glass markets
Jun. 18, 2014, 2:04 PM
- As rumored, Amazon's (AMZN +0.8%) Fire phone features a 4.7" display (no resolution has been given yet, rumors pegged it at 720p), a Qualcomm Snapdragon CPU (2.2GHz., quad-core), and a 13MP rear camera. (live blog)
- The camera features optical image stabilization, and the display a circular polarizer meant to eliminate glare. The display is protected by Corning's (GLW +0.1%) Gorilla Glass 3.
- Stereo speakers are also on board, and magnetic earbuds with flat cables are bundled. Amazon hasn't yet shown off a 3D display, but pictures of the phone show the four front cameras (one at each corner) expected to enable 3D viewing.
May 23, 2014, 1:45 PM
- Korea's ETNews.com reports Samsung (SSNLF) and LG (LGEIY) are interested in adopting sapphire cover glass for their phones, and recently asked sapphire wafer/ingot makers to submit samples.
- The site adds the companies were previously reluctant to adopt sapphire due to its steep cost, but have changed their minds following Apple's embrace of the technology.
- Like much of the industry, Samsung/LG have been avid users of Corning's (GLW +0.5%) Gorilla Glass. Sapphire cover glass is thinner, stronger, and more scratch-resistant than Gorilla Glass, but also much more costly for now. Samsung took a 7.4% stake in Corning last year as part of a deal to sell its stake in the Samsung Corning JV.
- GT Advanced (GTAT +8%), currently quite busy ramping sapphire production for Apple, has shot higher on the report. Though GT has said its Apple deal "will be subject to certain exclusivity terms during the duration of the agreement," there could still be a long-term opportunity to service other OEMs. Moreover, stronger industry demand stands to improve GT's pricing power.
- SA author Matt Margolis notes the Apple exclusivity deal doesn't cover GT's sapphire laminate solutions (enabled by its Hyperion tech).
- Sapphire wafer vendor Rubicon (RBCN +4.8%) is also up sharply, aided by an Oppenheimer upgrade.
Apr. 28, 2014, 7:55 AM
- Corning's (GLW) Q1 beat was fueled by better-than-expected numbers for its Optical Communications (fiber) and Environmental Technologies units. The former saw sales grow 26% Y/Y to $593M, better than Q4's 12% clip and beating guidance for mid-teens growth. The latter's sales rose 21% to $228M, better than Q4's 9% rate and above guidance for mid-single digit growth.
- Optical sales were boosted by North American demand, and Environmental sales by demand for heavy-duty diesel emissions products.
- Thanks to the Samsung deal, Display Technologies (LCD glass) sales rose 58% Y/Y to $1B. Adjusted volumes rose by a low-single digit % Y/Y, and (as expected) price declines were higher than in recent quarters.
- Specialty Materials (Gorilla Glass) sales rose slightly Y/Y to $261M, and Life Sciences sales rose slightly to $210M. Both units were expected to see flat growth.
- LCD glass volumes are expected to be up by a high-single digit % Q/Q in Q2, and price declines to be "significantly less" than Q1's.
- Guidance for other units: Mid-to-high single-digit Y/Y growth for Optical, low-to-mid teen Y/Y growth for Environmental, 20%-25% Q/Q growth for Specialty Materials (Gorilla Glass demand, end of inventory issues), Life Sciences consistent with a year ago.
- Gross margin rose 100 bps Q/A and fell 100 bps Y/Y to 41%. The Samsung deal led op. margin to fall 420 bps to 13.7%, but Corning says it's making "terrific progress" with integration efforts.
- Corning ended with Q1 with $5.6B in cash, and $3.7B in debt.
- Q1 results, PR
Apr. 28, 2014, 7:26 AM
- Corning (GLW): Q1 EPS of $0.31 beats by $0.01.
- Revenue of $2.39B (+32.0% Y/Y) beats by $90M.
Apr. 27, 2014, 5:30 PM
Apr. 11, 2014, 9:48 AM
- Corning (GLW -1.4%) has been cut to Neutral by UBS.
- Symantec (SYMC -1.3%) has been cut to Equal Weight by Barclays.
- TE Connectivity (TEL +1.3%) has been upgraded to Buy by BofA/Merrill.
- Imperva (IMPV +1.6%) has received a contrarian upgrade to Buy from Sterne Agee a day after falling 44% due to its Q1 warning.
- Demandware (DWRE +0.9%) has been upgraded to Outperform by BMO.
- Ellie Mae (ELLI -5%) has been cut to Market Perform by FBR.
Mar. 26, 2014, 9:54 AM
- Corning's (GLW +2.8%) earnings power will be boosted by a multi-year TV replacement cycle and its multiples could benefit from glass industry consolidation caused by the poor balance sheets of rivals, thinks Susquehanna's Mehdi Hosseini, upgrading shares to Positive.
- Hosseini also forecasts "material improvement in the cost and margin profile" for Gorilla Glass thanks to the Samsung deal and the shifting of some production from Japan to South Korea. That, in turn, will allow Gorilla Glass to maintain at least a 10x cost advantage relative to sapphire, which GT Advanced (GTAT -0.5%) is set to make large volumes of for Apple.
- He also points out 45% of 2013 Gorilla Glass demand came from tablets, a market for which sapphire could remain cost-prohibitive for a while.
- Global TV shipments fell in both 2012 and 2013, thanks to high penetration rates and a shift in consumer electronics spend towards smartphones/tablets. DisplaySearch has forecast modest growth for 2014.
Mar. 11, 2014, 6:46 PM
- Intel's (INTC) new MXC server interconnect cables leverage the chip giant's silicon photonics tech and optical fibers developed by Corning (GLW) to enable 1.6Tbps transfer speeds (800Gbps each way) via 64 fibers running at 25Gbps apiece. Traditional solutions work at 10Gbps, and max out at 12-24 fibers.
- Corning plans to begin selling MXC cable assemblies, which have a range of 300 meters, in Q3. Intel asserts the technology's per-fiber throughput could eventually double to 50Gbps. The companies think supercomputer (HPC) vendors and cloud computing firms will be among the first buyers.
- Over time, MXC's blistering speeds stand to further Intel's goal of creating server architectures in which CPU, memory, storage, networking, and other resources can be separately pooled and upgraded as needed. "The ability to take my memory and stash it a rack away, optical can enable that," says Intel exec Mario Paniccia.
- Intel's efforts pose a challenge to optical component vendor Finisar (FNSR), whose shares sold off a year ago on worries about Intel and Cisco's silicon photonics efforts. They're also a challenge to high-speed interconnect leader Mellanox (MLNX), which last year acquired silicon photonics startup Kotura and 100G interconnect developer IPtronics. Since then, Mellanox has said it will ship 100G silicon photonics products in late 2014 or early 2015.
Mar. 4, 2014, 2:56 PM
- As part of the $2B buyback it announced in tandem with last October's Samsung deal, Corning (GLW +1.9%) is buying back $1.25B worth of shares through an accelerated share repurchase deal with Citi.
- The ASR, expected to be finished in Q2, is good for repurchasing 4.6% of shares at current levels.
- Separately, Goldman's Simona Jankowski is downplaying the impact of Apple's sapphire supply deal with GT Advanced, which has stoked fears Apple will stop using Gorilla Glass to cover iOS device displays.
- Jankowski estimates the revenue impact of lost Apple share for Corning will only amount to $38M-$150M/year; the company's 2014 revenue consensus is at $10.1B.
- Two undiscussed issues: 1) Whether Apple's move will compel other mobile OEMs to explore using sapphire cover glass. 2) Whether the OEMs will be able to obtain enough sapphire to use it, given Apple's exclusive relationship with GT.
Feb. 11, 2014, 12:44 PM
- Chinese sites report Apple's (AAPL +1.4%) iWatch will feature sapphire cover glass, but its next-gen iPhone won't due to cost concerns.
- Apple sapphire manufacturing partner GT Advanced (GTAT -5.1%) is selling off, while Gorilla Glass supplier Corning (GLW +1.4%) is following the tech sector higher.
- 9to5 Mac reported last week GT has received delivery of 518 sapphire chamber/furnace systems - enough, according to one analyst, to provide cover glass for 103M-116M 5" iPhones per year - and is ordering another 420 systems.
- It's worth noting Apple is generally believed to obtain a 50%+ gross margin on its latest-gen iPhones, and hasn't been scared in the past to use costlier components for the sake of improving the user experience.
Jan. 28, 2014, 9:34 AM
- Though Corning (GLW -7.8%) beat Q4 estimates and is guiding for its display technologies (LCD TV/monitor glass) volumes to be "in-line with normal seasonality" in Q1 (down slightly Q/Q), it also "expects LCD glass price declines to be higher than previous quarters."
- Price declines are expected to "return to moderate levels" afterwards, and Corning expects 2014 retail demand (in terms of sq. feet) to be "up a mid-to-high single digit percentage."
- Display technologies sales (33% of total) fell 5% Y/Y in Q4 to $665M after growing 7% in Q3; the segment's core earnings were flat. Optical communications (fiber) sales rose 12% to $605M vs. 24% in Q3, but an unfavorable mix and shutdowns led earnings to drop 18%.
- Specialty materials (Gorilla Glass) sales fell 29% to $285M vs. a 10% drop in Q3 (customer inventories are blamed). But sales are expected to be flat in Q1. Environmental technologies +9% to $238M vs. -3% in Q3, life sciences (lifted by M&A) +14% to $185M vs. +39%.
- Environmental sales are expected to be up by a mid-single digit % in Q1 and optical sales by a mid-teens %. Life sciences sales are expected to be flat.
- Q4 gross margin was 40%, down 400 bps Q/Q and 200 bps Y/Y. Gorilla Glass declines and optical mix are blamed. Thanks to the Samsung deal, $1.08B was spent on buybacks, which boosted EPS. SG&A spend -7% Y/Y to $332M, R&D -23% to $169M.
- Q4 results, PR
Jan. 28, 2014, 9:10 AM
Jan. 28, 2014, 7:37 AM
- Corning Inc. (GLW): EPS of $0.29 beats by $0.02.
- Revenue of $2B (-2.4% Y/Y) beats by $70M.
Corning, Inc. develops and manufactures specialty glass and ceramics. The company provides glass for notebook computers, flat panel desktop monitors, LCD televisions, and other information display applications; optical fiber and cable and hardware and equipment products for the... More
Industry: Diversified Electronics
Country: United States
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