NEW YORK (AP) -- Corning Inc. shares rose Friday after an Oppenheimer & Co. analyst upgraded the stock, saying the company has many strengths aside from its display glass business.
THE SPARK: Analyst Andrew Uerkwitz raised his rating to "Outperform" from "Perform" and set a price target of $16 per share. He wrote that the display glass business brings in about 80 percent of the company's profit, and said the stock should trade higher as display revenue improves.
"We believe display pricing is stabilizing and volumes will improve, which should enable investors to focus more on the company's other strengths," he wrote. He said those include its telecommunications, environmental services, and specialty materials businesses.
Uerkwitz said the telecommunications business could rise 40 percent over the next few years on greater data center and home fiber optic revenue, while the environmental service business should benefit from tighter regulations on emissions. He said the specialty materials business will report greater revenue as smartphone and tablet computer sales rise.
He also noted that recently hiked its quarterly dividend payments by 50 percent to 7.5 cents per share.
THE BIG PICTURE: In late July, Corning said its second-quarter net income tumbled 39 percent from a year ago on lower sales volumes and prices of its liquid-crystal-display glass products. Its earnings per share was a penny less than analysts expected. Revenue edged down to $1.91 billion from $1.92 billion, short of analysts' predictions for $2.02 billion.
The company also forecast disappointing third-quarter results, saying it was concerned about the weak European economy and slower economic growth in China.
SHARE ACTION: Corning shares gained 33 cents, or 2.8 percent, to $11.95 in afternoon trading. The stock has risen from a low of $10.62 on Aug. 1, its lowest price since March 2009.
