Shares of Corning (NYSE:GLW) fell about 7% premarket on Tuesday despite third quarter results and fourth quarter outlook exceeding estimates.
Third quarter GAAP net sales soared about 21% year-over-year to $4.1B, while Core Sales jumped 14% year-over-year to about $4.27B. Core EPS surged around 24% year-over-year to $0.67. Both top and bottom line numbers beat analysts estimates.
“Beyond our strong third-quarter performance, we see significant growth ahead, fueled by powerful secular trends. To share just a few examples, we are ramping to meet remarkable demand for both our new Gen AI and U.S.-made solar products, and Apple’s recent $2.5 billion commitment to produce 100% of iPhone and Apple (AAPL) Watch cover glass at our Kentucky facility creates a larger, longer-term opportunity,” said Chairman and CEO Wendell Weeks.
Weeks noted that the company has added $4B to its annualized sales run rate, and has “significantly improved” its profitability – with an expected operating margin of 20% in the fourth quarter, a year ahead of plan.
Third quarter net sales from the Optical Communications unit soared 33% year-over-year to around $1.65B.
Corning said Optical Communications’ Enterprise sales grew 58% year over year in the third quarter, driven by the continued strong adoption of Corning’s new Gen AI products.
Display Technologies’ net sales declined 7% year-over-year to $$939M, while net sales from Specialty Materials unit grew 13% year-over-year to $621M.
Net sales from Automotive unit grew 6% year-over-year to $454M. Meanwhile, net sales from Life Sciences segment dipped around 1% year-over-year to $242M. Hemlock and Emerging Growth Businesses soared 46% year-over-year to $364M.
Outlook
“We expect continued strong growth in the fourth quarter, driven by ongoing robust demand for our Gen AI products and sales of solar wafers,” said Ed Schlesinger, executive vice president and CFO. “Additionally, we are on track to achieve our Springboard operating margin target of 20% in the fourth quarter, a year ahead of plan. This represents a 370-basis-point improvement from our Q4-2023 starting point – and establishes a strong return profile as we continue to grow sales.”
Corning expects fourth quarter core sales of about $4.35B compared to consensus estimate of $4.26B. The company expects core EPS again growing faster than sales to a range of $0.68 to $0.72 (midpoint at $0.70) versus consensus of $0.67.