Corning Earnings: An Early Look

With hundreds of companies having already reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction that turns out to be exactly the wrong move.

Let's turn to Corning (NYSE: GLW  ) . Corning has been a huge innovator in the display market, but weakness in the industry has put a lid on its growth potential. Will the company bounce back? Let's take an early look at what's been happening with Corning over the past quarter and what we're likely to see in its quarterly report on Tuesday.

Stats on Corning

Analyst EPS Estimate

$0.33

Change From Year-Ago EPS

0%

Revenue Estimate

$2.07 billion

Change From Year-Ago Revenue

9.7%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will Corning look shinier this quarter?
Analysts have stuck by their original estimates for Corning's net income this quarter, actually increasing their EPS estimates by a penny in the past three months. But shareholders have been on edge, as the stock has only risen 2% since late October despite a nice run in the overall stock market.

As much as Corning's innovative Gorilla Glass gets discussed, it represents only a small fraction of Corning's overall revenue. Much more important for the company is the LCD market, and given its huge reliance on just a handful of customers -- Corning gets more than half its revenue from its top 10 clients -- the health of those players will have a big impact on whether Corning succeeds.

Still, Gorilla Glass has plenty of growth potential. Intel (NASDAQ: INTC  ) recently announced specs for its new line of Ultrabooks, and they'll require manufacturers to use touch displays. With Corning in line to supply many of those displays, Intel's move should help bolster Corning's business.

One big potential threat to Corning is Universal Display (NASDAQ: OLED  ) , whose OLED technology looks to be the wave of the future for large displays. If efforts from major tech companies to create smart TVs take off, the key for Corning will be whether they use its LCD technology or more advanced OLEDs. If it's the latter, Corning will need to move quickly to establish itself in that cutting-edge market, or else Universal Display will have a big advantage.

Most of the attention to Corning's results on Tuesday will rightly revolve around the display market, which gives Corning nearly all of its profits. But what you should keep an eye on is whether the company keeps working to diversify its product base. If it can go beyond displays to broaden its scope, Corning will benefit more from a coming economic recovery.

Learn more
Get a much closer look at Corning's entire business operations by reading our premium report on the stock. Inside, you'll get our top tech analyst's view of whether Corning is a buy as it continues to try to capitalize on the mobile revolution. Don't wait until after tomorrow's earnings report; click here now to claim your copy, and receive a full year of updates as key events unfold.

Click here to add Corning to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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