Why I'm Scared of Corning

In the video below, Fool analyst Austin Smith takes a look at some potential worries for investors in Corning (NYSE: GLW  ) .

Austin own shares of Corning, but there are some things about the company that make him a bit uneasy. The first  is that LCD TV panels are not what they once were and are now giving up some ground to more expensive OLED panels. The general consensus is that OLED panels are more superior. Should they become less expensive, which often happens with technologies over time, it could hurt Corning.

Another worry is that Gorilla Glass, one of the most compelling reasons to buy Corning, still makes up only about 20% of the company's revenue, and almost none of its earnings.

Smaller panels for smartphones and tablets have not offered the same profit potential as the large TV panels, so it would need to sell significantly more of the products to offset the losses in earnings, Austin says.

Corning's Gorilla Glass is widely believed to be the glass used in the iPhone, among other smartphones. Apple has been a longtime pick of Motley Fool superinvestor David Gardner, and has soared 219.20% since he recommended it in January 2008. David specializes in identifying game-changing companies like this long before others are keen to their disruptive potential, and he helps like-minded investors profit while Wall Street catches up. I invite you to learn more about how he picks his winners with a free, personal tour of his flagship service, Supernova. Inside, you'll discover the science behind his market-trouncing returns. Just click here now for instant access.


Read/Post Comments (5) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On January 09, 2013, at 11:56 PM, dannyo222 wrote:

    if OLED's were the next big thing, wouldn't that be good for lotus glass?

  • Report this Comment On January 10, 2013, at 10:56 AM, Razz037 wrote:

    I don't follow your logic on OLED glass. This article has no substance and was a waste of time.

  • Report this Comment On January 10, 2013, at 9:45 PM, jasonhad wrote:

    Austin is nakedly shilling for Motley - GLW products are used for OLED cover glass. Gorilla Glass is profitable, according to Corning - and growing. The move into labware - both disposable and reusable - may prove a contracyclical segment with solid margins. More and more public agencies worldwide are pushing for fibre optic networks - a core competency of GLW. Finally, screen sizes are on the rise for TVs and monitors in the two largest markets - the US and China, which may well absorb excess capacity for glass covers & substrates and firm up prices, with plenty of leveragae for Corning, the low-cost producer.

  • Report this Comment On January 11, 2013, at 10:25 AM, Razz037 wrote:

    Corning does make OLED display glass. It is called Lotus glass. That is why I have a hard time understanding his statement about OLED.

  • Report this Comment On January 11, 2013, at 10:59 AM, sidneyleejohnson wrote:

    You might be thinking of Willow for oled. Or perhaps they both are directed that way...but thin film encapsulation methods for new flexible (Unbreakable ) displays may avoid Corning glass (of any variety) altogether. Look at CES 2013 Youm demos and ask yourself was anything from Corning used.

    Samsungs A2E and A2 phase 3 transitions into unbreakable this year...they retool A2 phase 1 and 2 to flexible after that. Toss in V1/V2, Ask yourself if LG will use Corning to cover their OLED TV from lines M1/M2 or if they use some other thin film encapsulation choice.

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