Corning Incorporated Earnings: Can the Stock Keep Climbing?

The glass specialist has ridden the wave of mobile devices higher, but will larger displays bounce back?

Apr 25, 2014 at 11:00AM

On Monday, Corning (NYSE:GLW) will release its quarterly report, and investors have gotten excited about the glassmaker's growth prospects in light of huge demand for its Gorilla Glass mobile device product. Yet as important as major device makers have been as Corning customers, Corning has to fend off new potential competition from sapphire maker GT Advanced Technologies (NASDAQOTH:GTATQ) and plastic organic-light-emitting-diode display maker Universal Display (NASDAQ:OLED).

Corning has been in the glass business for decades, pioneering the use of glass in technological advances like fiber optics. But lately, the display business has been a key to Corning's growth, as manufacturers demand durable products that can resist common wear and tear and provide protection for essential electronic components. As much as Corning has benefited from its Gorilla Glass line of products, though, it must remain vigilant in light of advances from GT Advanced Technologies, Universal Display, and other companies that would love to supplant Corning's position of strength. 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 report.

Source: Corning.

Stats on Corning

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$2.30 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Corning earnings keep surprising investors?
In recent months, analysts have downgraded their views on Corning earnings, reducing first-quarter estimates by $0.02 per share and full-year 2014 projections by about 4%. The stock has performed quite well, though, rising 13% since mid-January.


Source: Corning.

Corning's fourth-quarter results showed the pressure that the glassmaker is under to produce strong growth. Even though Corning's adjusted earnings came in above what investors had expected to see, shares dropped 6% as shareholders focused on weakness in its specialty materials division, which includes its Gorilla Glass products. The division's sales dropped 29% and profits declined 42% as Corning shipped less Gorilla Glass to makers of tablets and smartphones than it did the year before. Meanwhile, even as sales of fiber-optic cable sent optical communications division revenue 12% higher, operating income dropped because of the low margins in that product. Strength in life sciences and environmental technologies wasn't enough to offset the negative sentiment elsewhere.

Corning faces challenges on multiple fronts. On one hand, major smartphone makers are looking at alternatives to Gorilla Glass, with new iPhone models potentially sporting greater amounts of sapphire. GT Advanced Technologies managed to score a $578 million deal to provide sapphire products that could eventually see greater volume in iPhones and other devices, and if the price disparity starts to decline, it could pose a huge problem for Gorilla Glass. On the other hand, the LCD market is incredibly important to Corning, as the sheer volume of glass involved in large displays is so much greater than tiny smartphones that large displays can move the needle much farther on Corning earnings. With projections that LCD pricing will continue to erode, Corning hasn't yet addressed this problem to investors' satisfaction.

Yet even as many look at sapphire products as the great competitor to Gorilla Glass, others see curved OLED displays as an even larger threat. Universal Display has come out with a proprietary flexible OLED technology that could eventually replace Gorilla Glass, but Corning argues that its Willow Glass product -- which is flexible where Gorilla Glass is not -- has a more environmentally friendly manufacturing process that also saves manufacturers money.

In the Corning earnings report, watch to see whether management comments on the upcoming iPhone 6 release and the mix of Gorilla Glass and other materials. Yet you should also look beyond mobile devices to see if Corning is making more progress on LCDs, as that industry has the most potential to make or break Corning stock.

Bigger than glass, here's the biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for less than you'd think possible. Click here to get the full story in this eye-opening new report.

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

Dan Caplinger doesn't own shares of the companies mentioned in this article. The Motley Fool recommends and owns shares of Corning and Universal Display. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers