Corning Inc (GLW) Q3 2023 Earnings: Profitability and Cash Flow Continue to Improve
Corning Inc (NYSE:GLW) reports Q3 2023 GAAP sales of $3.2 billion and core sales of $3.5 billion.
Profitability and free cash flow sequential increases were driven by pricing actions, primarily in Display Technologies, and companywide productivity gains.
Corning Inc (NYSE:GLW) expects similar core gross margin and another quarter of strong free cash flow in Q4 2023, despite sequentially lower core sales of $3.25 billion.
Corning Inc (NYSE:GLW) continues to extend its market leadership and execute on 'More Corning' content opportunities.
Corning Inc (NYSE:GLW) announced its third-quarter 2023 results on October 24, 2023, showing continued progress on its priorities to improve profitability and cash flow, even with weak demand across its markets. The company reported GAAP sales of $3.2 billion and core sales of $3.5 billion, consistent with the second quarter. The company's third-quarter core gross margin increased to 37%, a 340 basis-point improvement from the fourth quarter of 2022. Free cash flow grew to $466 million.
Financial Highlights
Corning Inc (NYSE:GLW)'s third-quarter GAAP EPS was $0.19, while the core EPS of $0.45 remained consistent sequentially. The difference between GAAP and core EPS primarily reflected constant currency adjustments, translated earnings contract gains, and translation gains on Japanese-yen-denominated debt, as well as restructuring and asset write-off charges.
The company's third-quarter free cash flow improved to $466 million, up $156 million sequentially and $211 million year over year. For the fourth quarter, management expects similar core gross margin and another quarter of strong free cash flow, despite sequentially lower core sales of $3.25 billion.
Business Segment Performance
In Optical Communications, third-quarter sales were $918 million, down 14% sequentially, reflecting lower order rates from carriers. In Display Technologies, sales were $972 million, up 5% sequentially, with net income up 16% sequentially, primarily driven by price increases. Specialty Materials reported third-quarter sales of $563 million, up 33% sequentially, driven by higher Gorilla Glass sales resulting from customer product launches in the quarter.
Outlook
For the fourth quarter, Corning Inc (NYSE:GLW) expects core sales to be approximately $3.25 billion. Despite lower sequential fourth-quarter sales, the company expects to deliver a gross margin percentage similar to the third quarter and another quarter of strong free cash flow.
Strategy in Action
Corning continues to drive profitable multiyear growth by inventing, making, and selling life-changing products while cultivating deep, trust-based relationships with industry leaders. The company's markets include optical communications, mobile consumer electronics, display, automotive, solar, semiconductor, and life sciences.
This article first appeared on GuruFocus.
