Corning (GLW) Tops Q1 EPS by 2c, Revenues Beat; Offers 2Q EPS/Revenue Guidance Above Consensus

Corning (NYSE: GLW) reported Q1 EPS of $0.45, $0.02 better than the analyst estimate of $0.43. Revenue for the quarter came in at $3.3 billion versus the consensus estimate of $3.13 billion.

Corning reported a strong first quarter:

• GAAP and core sales were $3.3 billion, year-over-year increases of 38% and 29%, respectively
• GAAP EPS was $0.67, reflecting strong performance and a non-cash, mark-to-market gain associated with the company’s currency-hedging contracts
• Core EPS grew 125% year over year to $0.45
• All segments grew sales and net income by double-digit percentages year over year
  • Environmental Technologies grew sales 38% and net income 111%
  • Specialty Materials grew sales 28% and net income 78%
  • Optical Communications grew sales 18% and net income 283%
  • Life Sciences grew sales 16% and net income 26%
  • Display Technologies grew sales 15% and net income 40%
• Free cash flow of $372 million grew $691 million year over year and equates to 39% of 2020 total
• Profitability was impacted by approximately $50 million due to elevated freight and logistic costs and global supply chain disruptions

Wendell P. Weeks, chairman and chief executive officer, said, “We are off to an outstanding start in 2021. Our success in the first quarter is yet another proof point that we have built a stronger, more resilient company. And we’re confident that we can build on these results to maintain momentum throughout the year.”

Weeks continued, “Corning is uniquely qualified to address some of the world’s toughest challenges. Our innovative capabilities put us at the heart of multiple trends that are reshaping the world. This provides a powerful source of long-term growth as we drive more Corning content into the industries we serve.”

Weeks concluded, “We remain steadfast in our commitment to support our people, customers, and communities by applying the strength of our products and resources.”

GUIDANCE:

Corning sees Q2 2021 EPS of $0.49-$0.53, versus the consensus of $0.48. Corning sees Q2 2021 revenue of $3.3-3.5 billion, versus the consensus of $3.24 billion.

Tony Tripeny, executive vice president and chief financial officer, said, “Corning had an excellent quarter. We delivered sales, EPS, and cash flow above our expectations. We are off to a great start, and we expect this momentum to continue throughout the year.”

Tripeny added, “Multiple events disrupted global supply chains in the first quarter, and we experienced elevated freight and logistic costs that impacted profitability. We expect that these costs will normalize longer term and will begin to decline in the second quarter as we take mitigating actions. We will continue to do what it takes to deliver for our customers.”

The company reiterated its commitment to financial stewardship and prudent capital allocation. Corning’s priorities are to generate strong cash flow and use cash to grow, extend market leadership, and reward shareholders. In February, Corning announced a quarterly dividend increase of 9% to $0.24 per share. In April, Corning resumed share repurchases, buying back 4% of its outstanding shares from Samsung Display Co., Ltd.

For the second quarter, the company expects core sales to be in the range of $3.3 billion to $3.5 billion and core EPS in the range of $0.49 to $0.53. Corning anticipates strong demand and positive momentum across its businesses to continue throughout 2021.

For earnings history and earnings-related data on Corning (GLW) click here.

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