Apple's Glass Supplier Corning Outperforms in Tough Market, Eyes $3B Sales Boost in Three Years

Corning Inc GLW reported a fiscal first-quarter 2024 core sales decline of 3% year-on-year to $3.26 billion, beating the consensus of $3.12 billion. 

The Apple Inc AAPL glass supplier’s core EPS of $0.38 beat the consensus of $0.35. 

Display Technologies’ sales grew by 14% year over year to $872 million, driven by higher volume and pricing actions in the second half of 2023. However, sales remained flattish quarter over quarter.  

Optical Communications sales declined 17% year over year to $930 million, reflecting temporarily lower carrier demand as customers continued to draw down inventory. 

Sales increased by 3% quarter over quarter, driven by growing sales in carriers and enterprises.

Specialty Materials sales increased by 12% year over year to $454 million, driven by continued strong demand for premium smartphone cover materials and semiconductor-related products. 

The bet sales declined 4% Q/Q.

Life Sciences sales decreased by 8% year over year to $236 million as customers in North America and Europe continued to draw down their inventory. The sales declined by 2% quarter over quarter.

Environmental Technologies sales grew by 6% year over year to $455 million, driven by increased gasoline particulate filter adoption in China. The sales also grew by 6% quarter over quarter.

Hemlock and Emerging Growth Businesses sales declined 19% year over year to $311 million, primarily reflecting lower pricing for solar-grade polysilicon and lower sales in Corning Pharmaceutical Technologies from the completion of volume commitments for COVID-related products. The sales decreased 13% quarter over quarter.

The core gross margin increased by 160 bps to 36.8%, reflecting the continued benefit of pricing and productivity improvement actions. The adjusted free cash flow used was $(62) million versus $(383) million a year ago.

Chair and CEO Wendell P. Weeks said, “We are executing our plans to add more than $3 billion in annualized sales within the next three years, and we already have the required capacity and capabilities in place.”

Outlook: Corning expects second-quarter core sales of $3.40 billion (consensus $3.33 billion) and core EPS of $0.42 – $0.46 (consensus $0.44) and anticipates the first quarter to be the low quarter of the year.

Corning stock gained close to 4% in the last 12 months. Investors can gain exposure to the stock via First Trust S&P 500 Diversified Dividend Aristocrats ETF KNGZ and ProShares S&P Kensho Cleantech ETF CTEX.

Price Action: GLW shares traded higher by 5.11% at $33.41 at the last check Tuesday.

Photo via Wikimedia Commons