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Corning (GLW) to Report Q3 Earnings: What's in the Cards?

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Zacks Equity Research
·4 min read
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Corning Incorporated GLW is scheduled to report third-quarter 2020 results on Oct 27, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 127.3%. The bottom line surpassed the Zacks Consensus Estimate by 14 cents. Notably, Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

The company is expected to have recorded slightly lower aggregate revenues year over year due to end-market challenges. Nonetheless, it continued to seek ways to leverage its deep technology, manufacturing and engineering capabilities to combat the COVID-19-related woes.

Factors at Play

During the quarter under review, Corning announced a collaboration with EnerSys — a leader in stored energy solutions for industrial applications — to speed up 5G deployment by simplifying the delivery of fiber and electrical power to small-cell wireless sites.

Corning introduced its newest breakthrough in glass technology, Gorilla Glass Victus. The glass significantly improves drop and scratch performance for the first time in the Gorilla Glass family, addressing consumer demand for improved durability.

These developments are likely to have aided the company’s performance. Corning expects third-quarter sales to grow in a low-teen percentage sequentially. Profitability growth is estimated to outpace sales growth as Corning’s cost-control efforts have enhanced operating leverage.

The Zacks Consensus Estimate for the Optical Communications segment’s net sales is pegged at $927 million. The figure indicates a fall of 7.9% from the year-ago quarter’s reported figure. The lower projection is due to the decline in the passive optical market. The consensus mark for Display Technologies net sales is $760 million, which suggests a decline of 4.2% from the prior-year quarter’s reported figure. This downside can be attributed to lower glass volume and prices.

The Zacks Consensus Estimate for Specialty Materials net sales is $539 million, which indicates growth of 16.4% year over year. The segment’s performance is likely to have been driven by strong demand for premium glasses, growth in IT products due to work- and study-from-home trends as well as demand for products in the semiconductor equipment space. The consensus estimate for Environmental Technologies is pegged at $333 million, which suggests a decline of 16.1%. This was a result of vehicle manufacturers’ suspended production in key markets. The Zacks Consensus Estimate for Life Sciences stands at $252 million, which suggests a slip from $256 million reported in the prior-year quarter.

For the September-ended quarter, the Zacks Consensus Estimate for revenues is pegged at $2,921 million, indicating a fall of 1.6%. Adjusted earnings per share are pegged at 36 cents, which suggests a decline of 18.2% year over year.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Corning this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Corning’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 36 cents.

Corning Incorporated Price and EPS Surprise

Corning Incorporated Price and EPS Surprise
Corning Incorporated Price and EPS Surprise

Corning Incorporated price-eps-surprise | Corning Incorporated Quote

Zacks Rank: Corning currently sports a Zacks Rank #1.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Generac Holdings GNRC is slated to release third-quarter 2020 results on Oct 28. It has an Earnings ESP of +4.70% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Century Communities CCS is scheduled to release third-quarter 2020 results on Oct 28. The company has an Earnings ESP of +7.53% and a Zacks Rank #1.

Owens Corning OC has an Earnings ESP of +12.46% and a Zacks Rank of 1. The company is set to report third-quarter 2020 results on Oct 28.

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