Are Investors Overreacting to Corning’s Business Update?
Corning shares dipped on Tuesday after the firm provided an early update on its third-quarter performance. Unfortunately, the firm is reducing expectations for two of its business segments.
Corning Inc. (NYSE: GLW | GLW Price Prediction) shares dipped on Tuesday after the firm provided an early update on its third-quarter performance. Unfortunately, the firm is reducing expectations for two of its business segments: Display Technologies and Optical Communications.
Within Corning’s Display Technologies segment, several panel manufacturing customers have reduced utilization below anticipated levels in the current quarter. As a result, Corning is reducing its volume forecast for that segment to a sequential decline of a high-single-digit percentage for the quarter.
The company continues to expect third-quarter prices to be flat with the second quarter and full-year glass prices to decline at a low-to-mid-single-digit percentage.
As for Corning’s Optical Communications segment, several major carriers are further reducing capital spending on cable deployments and fiber-to-the-home projects. Additionally, some enterprise customers have reduced their spending below anticipated levels.
Corning now expects third-quarter Optical Communications sales to decline year over year by a low-teen percentage, versus a prior expectation of a low-single-digit percentage decline.
For full-year 2019, Corning now forecasts Optical Communications sales will decline by 3% to 5%, compared with its prior expectation of a low-to-mid-single-digit percentage increase. Corning expects both carrier and enterprise network sales to decline year over year in the second half of 2019.
Analysts are calling for $0.45 in earnings per share (EPS) and $3.05 billion for the third quarter. In the same period of last year, Corning posted $0.51 in EPS and $3.04 billion in revenue.
Shares of Corning traded down about 8% to $27.62 Tuesday morning, in a 52-week range of $26.78 to $36.56. The consensus price target is $35.06.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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