What To Expect From Corning’s Q3 Earnings
Corning (NYSE: GLW) is scheduled to report its Q3 earnings on October 24, and we expect high single-digit growth in its overall revenues for the quarter. We expect that Corning’s sales in the quarter will be primarily driven by sales from its Specialty Material and Optical Equipment division. The increased popularity of Corning’s Gorilla Glass among Chinese smartphone makers, as well as Corning’s partnership with Verizon for the sale of its fiber optic products, are likely to be the key growth drivers this quarter. Additionally, while GPF filter sales in Europe will be insignificant in terms of Corning’s overall sales, they should provide an idea about Corning’s environmental technology growth in the coming quarters. The Display Technologies segment is likely to remain largely flat this quarter due to the mixed impact of declining LCD prices and increased demand for bigger LCD panels.
Specialty Material And Optical Equipment Sales Should Boost Profits
Corning’s Q3 sales are likely to see a jump because of the launch of Samsung’s two new flagship devices, both of which are equipped with Corning’s Gorilla Glass 5 and are expected to see record sales. Corning also increased its penetration in the Asian markets, where it partnered with Chinese smartphone manufacturers such as Xiaomi and Oppo with its Gorilla Glass products. Going forward, we expect Corning’s profits from this segment to increase substantially as major customer Apple announced new iPhones which have Corning glass backs.
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Corning’s Optical Communication segment has generally been a steady growth engine for the company in the last few years. The segment has seen tremendous growth due to the exponential increase in internet traffic and growth in video content on social media and other entertainment sites. Corning recently inked a three-year deal with Verizon to supply over $1 billion of its optical products for Verizon’s network support to 5G. These factors should help the division continue its growth momentum this quarter.
Weakness In Display Technology Likely to Continue
Display Technology, on the other hand, is the company’s largest segment in terms of sales and profits. Corning has a market leadership position in the large display market, and its margins are generally much higher than those of its competitors. However, due to the continued decline in LCD prices caused by demand-supply imbalance, the segment’s profit margins have suffered. We expect Corning to continue to face margin pressure from smaller LCD sizes, but the growth in large LCD displays may partially offset this.
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