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Corning Inc. Message Board

  • gfo99 gfo99 Dec 9, 2011 9:04 AM Flag

    Here's a decent evaluation of GLW

    Corning: Is Gorilla Glass Cracked?
    15 comments | by: Regarded Solutions December 8, 2011 | about: GLW, :
    There has been a lot of chatter about Corning (GLW) and its cutting edge LCD product "Gorilla Glass." So much chatter that Motley Fool believes that GLW is the stock to own forever, according to one of its publications that comes " free" with a subscription to their premium service.

    There are plenty of caveats in the publication of course, but when I read it I had to chuckle to myself that Corning of all companies would be the ONE stock to own now, and forever!

    After all, GLW does not have that many bullets in its rifle, and maybe, just maybe, they have been hit by a torpedo on its blind side, and will have a tough time recovering, let alone leading.

    The Basics

    Corning: Price: $14.00/share, 2.20% dividend yield, ESS Rating of bullish

    A Korean company of flat panel TV's has backed out of a "contract" to buy LCD glass from Corning resulting in an unprecedented announcement by the company that they are reducing earning guidance by THIRTY (30) PERCENT, and cutting glass production to reflect further declines, including those of its prized product, "Gorilla Glass." Read this report

    The Korean company to back out was not mentioned in their press release, but in a blog on Barron's (Read here) Tech Trader Daily, it was noted that LG Display Co. (LPL) was the firm that canceled the balance of its orders with Samsung Corning. If this is true, and I can find no report from Corning to dispute this information, it is a huge blow to the immediate future of Corning's LCD business overall. I believe LG is one of Corning's largest customers.

    It is of no surprise that flat panel TV sales have dropped significantly, and for this additional loss of business Corning already had "in the bag" is simply a disaster for the stock. LG was a huge customer of Corning, and they chose a less expensive glass to remain competitive. Something that Corning might realize but could not match.

    That being said, what else does Corning have to keep its 10 billion dollar "promise"?

    Well, they have Gorilla Glass. A fine product, perhaps the best in the industry, but it does have competition, and since Corning is cutting back on the production of this product as well, then they will have to re-tool, re-invest, and leap frog this technology to begin to regain its footing in my opinion.

    My Opinion

    Corning has been a fine company for a very long time. It has cash reserves, reputation, reliability, and has survived and thrived through good times and bad. I have even mentioned it in an article I wrote as a possible buy for a long term investor, and it might still be the case.

    The facts remain, however, that Corning has taken a body blow, and it could take quite some time for it to catch its breath.

    Even though the PPS has recovered since the initial news, I have decided to change my opinion of Corning, until such time that they can show me that they have a plan to recoup what they have lost. Revenue and earnings.

    I believe analysts will follow this train of thought, and I am selling my position at a decent exit point.

    * Please remember that this is my opinion, and not a recommendation for anyone to either buy or sell any stock mentioned here, or in any article. Do your own research and choose what investments are right for you to hold, buy, or sell using your own knowledge.
    Disclosure: I am long GLW. I will be selling my position at an acceptable exit price soon. I will not short this stock.

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    • Me have just one question. How much Corny lose next week. Anybody know?

    • I believe that your analysis and comments on Corning are pretty much right on. Gorilla does have competition - not as good - but at a lower price, soooo...

      Corning did lose the LG business (there are only two display companies in Korea, Samsung and LG, so obvious which the loss was at).

      Corning is a great company, but has its ups and downs, and there is really nothing strong in the pipeline.

      I too am long on Corning, and have added to my position when below $16, but at the right price (hopefully north of $22) I will sell, but watch it closely for cyclic buy and sell opportunities.

    • You insight is soooooooooooooooo 2009! Where people even talking about Gorilla glass 2 years ago????? After CES this year, all everyone will be talking about is flexible glass. Remeber go big or go home......

    • The loss of LG or whom ever the Korean customer is, it is a huge loss for Corning. From a valuation stand point, they are becoming less deserving even of a double digit PE. Will say this again since most of their EARNING comes from display (roughly 80-90%), this division is going to have to improve. All other drivers that people keep talking about ie fiber, life sciences and Gorilla are small players and even the beloved Gorilla is facing limited growth opportunities at this time. If they dont get it in TV's and other products, small mobile devices are not the key to success. As far as what they do with their cash with buy backs, managment have not shown any smart with this either. It is going to be a stale few months unless we hear some positive news from display. I am holding and will not add.

    • Insightful post. What investor SHOULD post instead of bashing and political blather.

      Comment: (I bought and sold GLW years ago, no dog in this fight-maybe time to get back in)

      Long term it is a buy. Their products are in demand and will be for years. Smartphones and TVs and all the other products that use their glass (around the world) are still in an uptrend. Agreed it is not a steep uptrend.

      I say buy at a 52 week low.

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