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Will Corning Inc. (GLW) Beat Earnings Estimates This Quarter?

Zacks Equity Research

Corning Inc. (GLW) is set to report second quarter 2013 results on Jul 30. Last quarter, it posted a 15.0% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Though the company’s revenue was down both sequentially as well as from the year-ago quarter, first-quarter earnings were above the Zacks Consensus Estimate by 4 cents due to favorable currency movements and a lower tax rate.

The first quarter was strong for Corning in terms of margin growth. This was mainly because of improvements in telecom and specialty materials margin that offset the price declines in the glass business.

Corning provided a tepid outlook for the second quarter, with gross margin expected to be flat sequentially. The tax rate for the core business is expected to be 16% while core earnings is likely to be down 15% year over year (roughly 23 cents, which is well below the Zacks Consensus Estimate of 31 cents).

Earnings Whispers?

Our proven model does not conclusively show that Corning will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents. Hence, the difference is 0.00%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Our model states that astock needs to have both a positive earnings ESP and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You could, therefore, consider other stocks like: 

InvenSense Inc. (INVN), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)

Gartner Inc. (IT), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy)

Scientific Games Corporation (SGMS), with an ESP of +100.0% and a Zacks Rank #3 (Hold)

Read the Full Research Report on SGMS

Read the Full Research Report on GLW

Read the Full Research Report on IT

Read the Full Research Report on INVN

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