Corning Earnings a Pleasant Surprise

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Corning Inc. (NYSE: GLW) reported first-quarter 2013 results before markets opened this morning. The specialty glass and technology products maker posted adjusted diluted earnings per share (EPS) of $0.30 on revenues of $1.81 billion. In the same period a year ago, the company reported EPS of $0.26 on revenues of $1.82 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.24 and $1.96 billion in revenues.

On a GAAP basis, Corning posted EPS of $0.33 for the quarter, compared with EPS of $0.31 in the same quarter a year ago. Adjusted revenues and earnings exclude the impact of currency exchange rates related to the Japanese yen and equity earnings from the company’s joint venture with Dow Chemical Co. (NYSE: DOW).

Corning also announced this morning that it is raising its quarterly dividend from $0.09 to $0.10 per share beginning with the second quarter of this year. The company also began a new share buyback program of $2 billion to last through the end of 2014. Corning repurchased $1.5 billion in stock through a buyback program that ended last December.

The company’s CEO said:

We believe the future for Corning is very bright. Our business results are improving, and we have seen two consecutive quarters of year-over-year core profitability improvements. In the display industry, we have stabilized our market share, moderated price declines and we are reestablishing positive momentum in the business.

Corning’s display business includes its Gorilla Glass product, which is used by many smartphone and tablet makers, including Apple Inc. (NASDAQ: AAPL). The company forecast shipments of specialty materials, which includes Gorilla Glass, to rise by 15% to 20% in the second quarter.

Samsung, which also uses Gorilla Glass in its phones and tablets, is expected to replace the Corning product with a new plastic in the next iteration of its Galaxy Note tablet. The company’s latest Galaxy S4 smartphone does use Gorilla Glass.

Motorola, now a division of Google Inc. (NASDAQ: GOOG), is also rumored to be considering replacing Gorilla Glass with a sapphire glass for its Motorola X phone anticipated later this year.

Corning’s shares are up about 2.8% in premarket trading, at $13.50 in a 52-week range of $10.62 to $14.58. Thomson Reuters had a consensus analyst price target of around $14.10 before today’s report.

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