How Is Corning Likely To Grow In the Next 2 Years?

by Trefis Team
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Corning
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Corning (NASDAQ: GLW) has seen a strong performance over the past couple of years, with 5% annual growth in revenue and a 35% jump in its stock price between 2015 and 2017. We expect strong growth across most of the company’s segments – Optical Communications, Specialty Materials, and Environmental Technologies – slightly offset by soft growth in the Display Technologies segment.

Corning generated around $10 billion in revenues for 2017, and we expect its revenues to increase by about 7% annually over the next two years. We have created an interactive dashboard  to assess Corning’s revenue growth in the next two years. You can modify the different revenue drivers to see how it will impact the company’s expected revenues.

Corning’s Segment Revenue Growth

Corning generates revenue from six primary segments: Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, Life Sciences, and Other.

Corning’s fastest growing business of late has been Specialty Materials, which grew to just over $1.4 billion in 2017 and witnessed 13% annual growth between 2015-2017. One of the major products in this segment is Gorilla Glass, which is used in many popular consumer electronics devices. Robust demand for Gorilla Glass turned this segment into the company’s fastest growing business, and Corning expects to remain a market leader in the segment going forward. Corning’s ability to substantially improve the quality and use cases of the product should further boost the segment revenue to just over $1.7 billion by 2019, annual growth of about 11% in the near term. We expect strong growth in this segment to continue, driven by improving demand for Gorilla Glass due to increased adoption by Apple, and Corning’s expansion into the automotive and wearables market.

Corning’s second fastest growing business has been Optical Communications, which grew to just over $3.5 billion in 2017 and witnessed 9% annual growth between 2015-2017. This segment provides optical network components to service providers. We expect this segment to continue to grow, driven by strong demand for optical fiber products, thanks to increased consumption of streaming and cloud services. The acquisition of 3M’s communication markets business, which is likely to expand both its global reach and portfolio, should provide significant long term growth opportunities.

Further, we also expect strong demand for Corning’s gas particulate filters (GPF’s) as governments look to tighten emission standards. This should drive its Environmental Technologies segment. On the other hand, we expect soft demand for its display technology segment to continue driven by sequential LCD price declines.

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