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Update: Corning Cleaning House At Dow Corning Before A Divestiture?
- Dow Corning announced its decision to close a manufacturing plant and reduce by about $1.3 billion its contribution to a fund to pay out claims arising from lawsuits.
- These actions by Dow Corning, and, as such, its owners DOW and GLW, are a likely prelude to GLW divesting its share of the joint venture.
- The CEO of Dow Chemical previously indicated that GLW may be about to sell its half of the Dow Corning multi-billion dollar joint venture.
- The proceeds from the sale of GLW's share of the Dow Corning joint venture may be used for an acquisition or an increased share buyback.
- We did not anticipate this specific announcement, but did recognize that GLW was interested in divesting its share of Dow Corning.
Update: Corning Acquires Leading Provider Of Fiber-Optic And Copper Cable/ComponentsWillow Street Investments • Tue, Dec. 16
- This acquisition by GLW is the latest in a series of acquisitions by the company in the last year.
- We see more acquisitions ahead as the company strengthens each of their divisions before an even more significant move by the company.
- The company recently increased their dividend by 20 percent and instituted a $1.5 billion share buy back.
- We did not anticipate this specific acquisition, but did recognize that the company is strategically strengthening each of the divisions through acquisitions.
Best S&P 500 Tech Stocks According To Piotroski Principles: Corning
- Ranking the top twenty S&P 500 tech stocks, according to principles of the well-known investor Joseph Piotroski.
- Explanation and back-testing of the "All-Stars: Piotroski" ranking system.
- Highlights and a buy recommendation for the third-ranked stock of the system; Corning Inc.
Corning: Multiple Company Announcements May Push Stock Over $25 Early In 2015
- A recent strong increase in global shipments of liquid crystal display televisions will likely ensure a strong performance in the company’s display technologies division.
- The company’s recent acquisition of the Samsung's fiber optics business will strengthen position in Asian economies and take advantage of growing demand for fiber optic cables and products.
- The recent announcement of Gorilla Glass 4 will continue to capitalize on growth opportunities in the consumer electronics market and the success of Gorilla Glass 3.
- The company has been expanding manufacturing capacity for its emissions products as demand increases for such products due to strict global emissions and air quality standards.
- The company continues to work on a major unannounced initiative for its life sciences division which it believes could become a large opportunity for the company.
- Corning hiked the dividend to an attractive 2.3%.
- Corning authorized another $1.5 billion share buybacks that adds to a history of value creation over the past three years.
- Corning leads a group of old-school technology stocks with high yields.
- Corning shares have been on the comeback trail for two years.
- The purchase of Samsung's fiber optics assets gives Corning more stability.
- This is moving from a trading stock to an investing stock. Look for an entry point.
Corning: Gorilla Glass 4 Can Cater To Demand For Damage Resistant, Thinner Displays
- Corning has introduced Gorilla Glass 4, which was a significant improvement over Gorilla Glass 3 and also most other competing cover glass in the market.
- We believe the glass will ensure Corning remains the market leader in the segment by catering to the growing demand for thinner and more damage-resistant devices.
- Gorilla Glass 4 could not have been launched at a better time, as smartphone manufacturers are increasingly demanding stronger cover glass.
Corning's Cash-Rich Balance Sheet And Impressive Growth Outlook Leads To Significant Upside Potential
- Corning shares trade at only 13 times forward earnings, despite a future projected earnings growth rate of 13.5%.
- The company possesses a strong balance sheet with nearly $5 per share in cash and its potential sale of Dow Corning would likely further improve its cash position.
- While the firm does face competitive pressures, at their current price its shares appear significantly undervalued with nearly 50% upside potential, according to a DRAG analysis.
Corning: About To Divest Its Share Of Dow Corning And Then Enhance Shareholder Value?
- The CEO of Dow Chemical indicated that GLW may be about to sell its half of the Dow-Corning multibillion dollar joint venture.
- The proceeds from the sale of GLW’s share of the Dow Corning joint venture may be used for an acquisition or a large scale share buyback.
- Continuing failure by GLW management to maximize shareholder value may result in large investors calling for a break-up of GLW or a company taking over GLW.
- In the next few months, the company is likely to increase its dividend and initiate a new share buyback program.
Optical Communications Segment Will Drive Future Growth For Corning
- The optical communications segment is one of the key business segments of the company.
- There is a major opportunity available for the segment from Australia, and it should allow Corning to grow its revenues from this region over the next few years.
- Consistent innovation in the segment should allow Corning to maintain an advantage over its competition.
- In addition to the revenue growth measures, the company is also trying to bring down the costs from the segment, which should enhance its margins.
Update: Corning Exceeds Earnings Estimates, Shareholder Friendly Actions Are Next
- The company’s earnings exceeded earnings estimates, as certain divisions outperformed others.
- The company’s board of directors agreed to accelerate their evaluation of future share repurchases and dividend increases.
- The increased use of GLW's Gorilla Glass product in the automotive industry may be the next growth driver for the company.
- We did not anticipate the exceeding of earnings estimates, but did anticipate the potential for increased share buybacks and a dividend increase.
Corning - Appeal Lures, Yet I Am Not Pulling The Trigger
- Corning posts solid third quarter results, beating on both the topline and bottom line results.
- At the same time the company warns about LCD volumes and prices in the upcoming quarter.
- I like the valuation, strong balance sheet and historical profitability, but hate the reliance on some key manufacturers and lousy stock track record of the stock.
- Corning reported 3Q EPS of $0.40, beating estimates by $0.03.
- Core sales increased 26% Y/Y to $2,649 million and core earnings increased 17% Y/Y to $568 million.
- After Corning reported somewhat disappointing 2Q results, the stock dropped 10% and my article called for investors to establish a long-term position on the pullback.
- Corning posted exceptional revenue growth of 23% and operating income growth of 41% year over year for Q3.
- Glass substrates for LCD displays remain Corning's most important business, which was never threatened by the sapphire display mirage.
- With future growth in Displays, Gorilla Glass, and optical fiber, Corning is poised for exceptional growth.
Corning: A Pre-Earnings Buy, As Company Has Options To Enhance Shareholder Value
- The company's shares have sold off in the last several months presenting potential investors with a better entry point.
- The company announced a joint development agreement with Maxwell Technologies to advance capacitive energy storage technology.
- Innovation for Gorilla Glass with respect to healthcare applications will boost GLW's performance in the intermediate term.
- Continuing failure by GLW management to maximize shareholder value may result in large investors calling for a break-up of GLW or in a company taking over GLW.
- The company’s shares yield over 2 percent in addition to substantial share buy backs.
Mr. Market Is Offering Corning At A Low, Low Price
- Benjamin Graham's "Mr. Market" is irrationally under valuing Corning stock.
- Corning's low P/B ratio and high free cash flow yield make a strong case that the stock is under valued.
- An investor who buys Corning and holds for the long run will enjoy exceptional returns.
Corning Sell-Off Creates An Attractive Buying Opportunity
- Core Net Sales were up 28% to $2.58 billion YOY, compared to $2.02 billion for the second quarter of 2013.
- Display Technologies sales were $1.1 billion, up 62% from $670 million YOY. LCD glass volume grew in the low teens percentage sequentially and was higher than anticipated.
- The stock is up more than 25% in the last year. When you factor in the current valuation, the stock still has about 32.1% upside remaining.
- GT Advanced Technologies blindsided shareholders Monday by declaring bankruptcy, triggered by a broken relationship with Apple.
- This was an unexpected and significant positive catalyst for Corning, a competitor that supplies Gorilla Glass to the mobile industry.
- Corning was already a cheap stock in the context of the overall market. The demise of its competitor is just one more reason to consider the stock for purchase.
Corning: Some Warts, But Ultimately A $30 Stock Within 5 Years
- Corning has recently gotten serious about a stock buyback program, taking off 100 million shares, or about 7% of company stock, within the past twelve months.
- The optical fiber/cable division, which accounts for 10% of Corning's business, has been growing at north of 20% and ought to spike the company's stock price.
- Corning does come with some warts in terms of past record, as its current profits are still lower than 2007 levels.
- Corning primarily manufactures glass, ceramics and related items but is also known for producing substrates and filters that are used in catalytic converters.
- The company is also expecting to benefit from the use of Gorilla Glass in automobiles. Gorilla Glass, a protective scratch resistant glass, is primarily used in consumer appliances and devices.
- Once this market opens up, even a 5% market share would mean a 30% increase in sales.
- As long as automobile sales keep increasing, emission standards keep getting revised and car manufacturers continue being innovative with their use of Gorilla Glass, the future for Corning looks bright.
Wed, Aug. 20, 1:27 PM
- Following a CC with compound semi consulting firm Yole Development about GT Advanced's (GTAT -2.4%) supply deal with Apple, CLSA's Mark Heller reports Yole believes at least one iPhone featuring sapphire cover glass will launch next month. However, it also thinks GT and Apple's sapphire finishing suppliers "are still struggling with yields."
- Yole estimates Apple's all-in sapphire cost is at a steep $25 for a 4.7" display, assuming a 30% growth yield and 60% finishing yield - that's over 8x the $3 cost estimate other analysts have provided for Gorilla Glass (GLW +1.5%) panels. GT is assigned an $8.90 ASP.
- At the same time, Yole thinks costs could drop to $16 if growth and finishing yields respectively improve to 60% and 75%, boosting GT's margins along the way.
- Heller writes Yole's base scenario suggests only 4.7M 4.7" sapphire displays, or 3M 5.5" displays, will be available by September. Worth noting: With Apple having reportedly placed orders for 70M-80M iPhone 6 units, those numbers appear conservative in the event at least one of the models fully uses sapphire.
- Corning is moving higher. The company stated last month Gorilla Glass sales have been hurt by "lower-than-expected sales for planned new models."
- Earlier: CLSA downgrades GT Advanced to Underperform
Tue, Jul. 29, 9:29 AM
- Corning's (NYSE:GLW) Q2 gross margin was 41.6%, +60 bps Q/Q but -300 bps Y/Y and driving the quarter's EPS miss.
- Contributing to the margin pressure: specialty materials (Gorilla Glass) sales, which tend to carry higher margins, were roughly flat Y/Y at $298M. Gorilla Glass sales missed expectations due to soft retail demand for smartphones/tablets and "lower-than-expected sales for planned new models." That could be a reference to Apple's sapphire production ramp ahead of the iPhone 6 launch.
- On the other hand, LCD glass division sales (boosted by the Samsung deal) rose 62% Y/Y to $1.1B, with glass volumes growing by a low-teens % Q/Q (better than expected). Price declines were moderate, as expected.
- Optical communications (fiber) sales were also better than expected, rising 14% to $601M. Environmental Technologies grew 25% to $285M thanks to demand for diesel emission control products, and life sciences rose 2% to $223M.
- Q3 guidance: LCD glass volumes will rise by a mid-single digit % Q/Q, with price declines moderating further; optical will grow by a mid-single digit % Y/Y, environmental will grow 20%-25% Y/Y; specialty materials will grow 10% Q/Q; life sciences will be up slightly Y/Y.
- With revenue up 25% Y/Y, SG&A spend rose 20% Y/Y to $318M, and R&D spend 16% to $208M. $200M was spent on buybacks. Corning has cut its full-year capex guidance by $200M to $1.3B.
- Q2 results, PR
Tue, Jul. 29, 7:31 AM
Mon, Jul. 28, 5:30 PM
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Fri, Jun. 20, 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
Wed, Jun. 18, 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.
Fri, May. 23, 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.
Mon, Apr. 28, 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
Mon, Apr. 28, 7:26 AM
Sun, Apr. 27, 5:30 PM
Fri, Apr. 11, 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.
Wed, Mar. 26, 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.
Tue, Mar. 11, 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.
Tue, Mar. 4, 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.
Tue, Feb. 11, 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.
Tue, Jan. 28, 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
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