On Wednesday, Corning (GLW 0.94%) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.
Corning has made a huge splash in the technology industry, with its innovative glass products becoming ubiquitous among the smartphones and tablets that have become so popular. Yet the drive toward smaller products has also challenged Corning to keep its overall revenue up in the face of weakness in other business segments. 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.
Stats on Corning
|
Analyst EPS Estimate |
$0.24 |
|
Change From Year-Ago EPS |
(20%) |
|
Revenue Estimate |
$1.96 billion |
|
Change From Year-Ago Revenue |
1.9% |
|
Earnings Beats in Past 4 Quarters |
3 |
Source: Yahoo! Finance.
Will Corning stay strong this quarter?
Analysts have gotten less excited in recent months about Corning's earnings prospects. They've cut their estimates on the just-finished quarter by $0.07 per share, with a reduction of full-year 2013 consensus earnings figures by more than double that amount. The stock has held up but has only gained about 3% since mid-January.
Corning has gained an impressive position in the mobile device industry because of its Gorilla Glass, and back in January, it revealed its latest version of the material at the Consumer Electronics Show. Yet as important as the mobile market has been for Corning, the company really needs to see gains in the LCD-television industry in order to get fully back on track. Despite some optimistic calls from the glassmaker, TV manufacturers Sony and Panasonic haven't seen strong sales lately, and Panasonic seem less confident about TV sales going forward.
One competitive threat to Corning that has arisen recently is the use of sapphire in smartphones. Although the material is expensive, it's stronger and more scratch-resistant than glass, and major smartphone manufacturers are starting to include sapphire in their products. Rubicon Technology and GT Advanced Technologies (NASDAQ: GTAT) are taking advantage of the trend with their sapphire-production capabilities, and with GT products costing just three to four times as much as Gorilla Glass, future advances that bring prices down further could put Corning in jeopardy.
In Corning's quarterly report, watch for signs of how changing dynamics in the smartphone market are affecting the glassmaker. For now, the company retains its leadership position, but how Corning defends it will be important for shareholders going forward.
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