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Wed, Apr. 20, 11:59 AM
- Looking for a way to better differentiate against rival cover glass solutions (and perhaps boost sale prices along the way), Corning (GLW +0.2%) has launched Vibrant Gorilla Glass, a solution that lets device makers imprint "multi-color, high resolution, photo-quality images" on Gorilla Glass.
- Corning exec Scott Forester declares Vibrant Gorilla Glass gives device makers "a new opportunity for customized decoration and commercial branding." One possible use: Giving mobile OEMs the ability to imprint their brand logos on Gorilla Glass when it's used on the back panel of a device.
- Samsung uses Gorilla Glass on the back of the Galaxy S6 and S7, in addition to having it protect the screen on the front. Apple (NASDAQ:AAPL), which also relies on Gorilla Glass for screen-protection, is rumored to be using an all-glass enclosure for its 2017 iPhones.
Tue, Apr. 12, 11:23 AM
- Believing the LCD TV supply chain in nearing a cyclical bottom, Goldman's Doug Clark has upgraded Corning (GLW +2%) to Buy, and hiked his target by $7 to $26.
- Below-average supply chain inventory and stabilizing LCD panel prices are seen as early signs of a bottom. Clark also expects Corning to benefit from "a combination of earnings diversification, stable glass price declines, recent FX moves, M&A, and stable shareholder returns as supportive of higher valuation and multiple expansion.”
- UBS' Steve Milunovich (Neutral rating, $18 target) is out with a more cautious note. He observes Taiwanese panel makers reported an 18% Q/Q sales drop in (seasonally weak) Q1 for large-panel shipments, and thinks there could be some risk to UBS' forecast for Corning to see 7% Q2 glass volume growth (following a 7% Q1 decline) if end-market demand remains weak.
- Last week: Corning buying optical component maker Alliance Fiber for $305M
- Now read Corning Set To Take Advantage Of The Growth Of Data
Fri, Apr. 8, 3:13 AM
- Yesterday afternoon, Corning (NYSE:GLW) announced it would acquire Alliance Fiber Optic Products (NASDAQ:AFOP), a provider of high-speed passive optical components, for $18.50/share (a 20% premium).
- Deutsche Bank is positive on the deal, citing the following benefits:
- Increased product breadth and market-reach in the web 2.0 and cloud scale datacenter market.
- Increased presence in developing and emerging Asia.
- Cost synergies.
- 3% incremental revenue growth.
- Firm raises price target to $23 from $21. Implied upside 11%. Maintains Buy rating.
- Street high for GLW is $30 (Argus). Street low is $15.75 (Drexel).
- Now read Why Corning Is On Its Way To $25/Share »
Thu, Apr. 7, 7:40 PM
- Corning (NYSE:GLW) is acquiring Alliance Fiber Optic Products (NASDAQ:AFOP), a provider of high-speed passive optical components used in telecom and data center applications, for $305M ($18.50/share) in cash. The price represents a 20% premium to AFOP's Thursday close, but is 17% below its 52-week high of $22.35.
- Naturally, Corning will add AFOP to its Optical Communications unit, a major supplier of optical fiber and related products (cabinets, cable, housings, etc.) for service providers and OEMs. Corning declares AFOP will "expand its market access to cloud data-center operators and OEMs, broaden its presence in Asia, and provide product and cost synergies."
- The deal is expected to close in Q2, and be accretive to EPS in its first year.
- AFOP +7.3% after hours to $16.59. The Corning deal follows earnings disappointments blamed in part on an inventory correction at AFOP's biggest Web 2.0 customer.
- Update: Alliance Fiber finished after hours trading up 23.9% to $19.15. There's apparently some speculation the company will get a higher bid.
Wed, Feb. 3, 10:42 AM
Tue, Jan. 26, 9:40 AM
- Thanks to a weak yen and soft PC/TV sales, Corning's (GLW +1.4%) core Display Technologies segment saw revenue drop 21% Y/Y in Q4 (14% exc. forex) to $732M. Division net income fell 53% to $243M, and core earnings (excludes forex and forex hedges, among other things) 34% to $234M. As expected, glass volumes fell slightly Q/Q, and prices fell less Q/Q than in Q3.
- Segment performance: Optical Communications sales rose 9% Y/Y to $736M, and core earnings fell by $1M to $47M; strong data center fiber demand likely boosted sales. Environmental Technologies sales rose 2% to $254M; core earnings fell by $7M to $29M. Specialty Materials (includes Gorilla Glass) revenue fell 14% to $275M; core earnings rose by $14M to $44M.
- Display Technologies guidance: LCD glass volume is expected to drop by a mid-to-high single-digit % Q/Q in Q1, with lower factory utilization among panel makers (expected to lower supply chain inventories) weighing. For 2016, glass volume is expected to grow by a mid-single digit %, aided by a low-single digit increase in TV sales and an increase in average screen size of at least 1.5". Moderate Q/Q price declines are expected to occur in Q1 and the whole of 2016.
- Other guidance: Specialty Materials revenue is expected to drop by a mid-teen % Y/Y in Q1 (iPhone-related weakness could be weighing), but grow by a low-teen % in 2016 (the iPhone 7 launch should provide a lift). Optical Communications sales are expected to grow by a low-to-mid single digit % in Q1, and by a mid-single digit % in 2016. Environmental Technologies sales are expected drop by 10% in Q1 - weak North American heavy-duty truck sales are blamed - and by a low-single digit % in 2016.
- Financials: A $1.25B accelerated buyback (announced in October, as part of a $4B buyback authorization) was finished in January. Q4 gross margin fell 300 bps Y/Y on a reported basis to 38%, and 200 bps on a core performance basis to 42%. Adjusted SG&A spend fell by 3% Y/Y to $370M; adjusted R&D spend fell by less than 1% to $208M. Free cash flow was $628M in Q4, and $1.46B in 2015. Corning ended Q4 with $4.6B in cash/short-term investments, and $4.5B in debt.
- Corning's Q4 results, earnings release
Tue, Jan. 26, 7:29 AM
- Corning (NYSE:GLW): Q4 EPS of $0.34 beats by $0.02.
- Revenue of $2.4B (-5.1% Y/Y) beats by $70M.
Mon, Jan. 25, 5:30 PM
Dec. 17, 2015, 10:59 AM
- Believing European and Chinese macro pressures are weighing on LCD TV sales, JPMorgan's Rod Hall has downgraded Corning (GLW -2%) to Neutral, and cut his target by $2 to $18.
- Hall sees LCD TV shipments dropping 2% for the second straight year in 2016, after growing 7% in 2014. "By the end of next year, depending on the macro situation, we believe consumer demand for 4K TVs is likely to be strong. However, with China and Europe flagging and the U.S. not looking particularly strong either we suspect that investors can wait longer before deciding to own stocks exposed to 4K penetration growth."
- The downgrade comes less than a week after Corning rallied on news it's selling its 50% stake in the Dow Corning silicon products JV to Dow Chemical.
Dec. 15, 2015, 6:18 PM
- The latest version of the Ford GT supercar will be the first production vehicle to have a windshield that contains Corning's (NYSE:GLW) Gorilla Glass. The GT also uses Gorilla Glass for two other applications.
- Corning and Ford (NYSE:F) state the use of Gorilla Glass lowers the car's weight by more than 12 pounds. Pound-for-pound, Corning claims Gorilla Glass has over 5x the strength of standard window glass.
- With Ford pricing the GT at $400K and aiming to sell ~250 units/year, the design win is far from a high-volume one. However, it serves as a useful reference win for Corning, which has been pitching automakers for years on Gorilla Glass' ability (for a price) to make cars lighter, more fuel-efficient, more aerodynamic (lower center of gravity), and quieter inside.
Dec. 11, 2015, 9:16 AM
Dec. 11, 2015, 7:55 AM
- Separate from its merger news, Dow Chemcial (NYSE:DOW) says it will buy the remaining stake in its 50/50 joint venture with Corning (NYSE:GLW).
- Dow says the deal will help it capture $400M in annual cost savings from the restructured ownership, and expects to yield more than $1B in additional annual EBITDA at full run-rate synergies; it is expected to be accretive to operating EPS, cash flow from operations and free cash flow in the first full year after the close of the transaction, expected in H1 2016.
- GLW will exchange its 50% interest in Dow Corning for 100% of the stock of a newly formed entity that will become a wholly owned subsidiary, which will hold ~40% ownership in Hemlock Semiconductor Group and ~$4.8B in cash.
- DOW +0.8%, GLW +5.5% premarket.
Dec. 1, 2015, 1:55 PM
- Corning (GLW +0.1%) is creating a Gen 10.5 LCD substrate glass manufacturing facility in Hefei, China next to an LCD manufacturing plant owned by client BOE Technology. (PR)
- After factoring government/commercial incentives, Corning expects a net outlay of $460M - $290M in cash and $170M in currently-owned precious metals. Using Corning's glass, BOE plans to begin mass-producing LCDs for large-size TVs by Q3 2018.
- As part of the deal, Corning has struck a long-term supply agreement with BOE for Gen 10.5 substrate glass produced by its Hefei facility. BOE has also extended a supply agreement for substrate glass manufactured at Gen 8.5 sizes and below.
- Corning notes the market for large-size TVs is expected to see a 20%+ CAGR (no timeframe is given). The company is coming off a Q3 in which its Display Technologies (LCD glass) segment saw revenue drop 25% Y/Y (11% excluding the impact of a weak yen) to $757M due to soft TV and PC demand.
Oct. 29, 2015, 8:05 AM
- The company earlier this week promised more than $10B in buybacks and dividends through 2019, and begins to deliver, agreeing with Morgan Stanley to buy back $1.25B in stock.
- The initial delivery will be for about 53.1M shares based on the current price, with the accelerated deal expected to be completed in Q1 and financed with cash on hand.
- At current prices, $1.25B would be enough to buy back just over 5% of the float.
- GLW +0.8% in thin premarket action.
- Previously: Corning plans over $10B in dividends/buybacks; LCD decline weighs on Q3 (updated) (Oct. 27)
Oct. 27, 2015, 9:46 AM
- Corning (GLW +1%) uses its Q3 report to state it plans to return over $10B via dividends/buybacks through 2019. The efforts will lower Corning's cash balance to $2B, and lead to an adjusted debt-to-EBITDA ratio of 2. Corning had $5B in cash/equivalents and $4B in debt at the end of Q3.
- The buyback authorization has been hiked by $4B, and a $1.25B accelerated buyback is planned for Q4. Corning plans to hike its dividend (current yield of 2.7%) by at least 10% annually through 2019. $812M was spent on buybacks in Q3.
- The company also promises to invest ~$10B through 2019 in its product portfolio by concentrating its "RD&E investment, capital spending, and strategic M&A on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five market-access platforms."
- The Display Technologies unit (LCD glass) weighed on Q3 sales: Its revenue fell 25% Y/Y (11% exc. a weak yen) to $757M, with segment net income falling 34% to $255M. Glass volumes fell slightly Q/Q (worse than guidance for a low-single digit % increase), and price declines were moderate. CFO Tony Tripeny: "The weakening global economy, particularly in China, and the stronger U.S. dollar impacted all of our businesses,"
- Optical Communications (fiber) was healthier, with sales rising 7% to $747M and net income rising 3% to $70M. Specialty Materials (Gorilla Glass) revenue fell 12% to $288M, but net income rose 7% to $46M. Environment Technologies revenue fell 9% to $257M, and net income 33% to $38M. Life Sciences revenue fell 1% to $211M, and net income 5% to $18M.
- Guidance: LCD glass volumes are expected to drop slightly Q/Q in Q4, and price declines are expected to be smaller than in Q3. Optical Communications revenue is expected to rise by a low-to-mid single-digit % Y/Y. Specialty Materials is expected to decline by a low-teens % Y/Y. Environmental Technologies and Life Sciences are both expected to decline by a mid-single digit % Y/Y. Dow Corning core equity earnings are expected to total $80M.
- Q3 results, PR
- Update (10:10AM ET): Corning is now up 4.4%.