Will Healthy Revenue Growth Improve Corning's Q3 Earnings?
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Corning Incorporated GLW is set to report its third-quarter 2024 results on Oct. 29, before the opening bell. It delivered a trailing four-quarter earnings surprise of 0.77% on average. In the last reported quarter, the company reported an earnings surprise of 2.17%.
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The advanced glass substrates producer is likely to witness revenue growth year over year, owing to healthy demand in several segments, including Optical Communications, Display Technologies and Specialty Materials.
Factors at Play
During the quarter, Corning introduced EXTREME ULE Glass - a next-generation material that aims to support chip manufacturers in addressing the escalating demand for advanced AI native technologies. This new glass will likely help chipmakers improve photomasks, which are critical for mass-producing sophisticated and cost-efficient microchips. The launch of EXTREME ULE Glass represents an advancement in Corning’s ULE (Ultra-Low Expansion) glass portfolio, a titania-silicate material known for its near-zero expansion traits that have been used for EUV photomasks and lithography mirrors. This innovative product launch is expected to drive demand for Corning’s solutions and boost the top line.
In the quarter under review, Corning inked an agreement with Lumen Technologies, according to which Lumen has opted to leverage Corning’s next-generation optical cable to boost its network infrastructure and support data centers’ AI demand. This development will likely have a favorable impact on upcoming results.
The company’s price adjustment strategy is expected to drive higher returns in the Display Technologies segment. Our revenue estimate is pegged at $1.03 billion, suggesting 6.2% year-over-year growth.
The company is witnessing solid traction in the Enterprise vertical of the Optical Communication segment backed by the growing adoption of optical connectivity products in AI data centers. Our revenue estimate for the Optical Communication segment is pegged at $1.11 billion, suggesting healthy growth from $918 million in the year-ago quarter.
Revenues from Environmental Technologies are projected at $437.9 million, down 2.5% year over year. A slowdown in the heavy-duty market in North America will likely impact sales in this vertical.
For the September quarter, the Zacks Consensus Estimate for revenues is pegged at $3.7 billion, indicating growth from the year-ago quarter’s figure of $3.46 billion. The consensus estimate for adjusted earnings per share is pegged at 52 cents, suggesting an increase from the year-ago quarter’s tally of 45 cents.
