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Corning Partners Intel for In-Building Network Solutions

Zacks Equity Research

Corning Incorporated GLW recently announced collaboration with Intel Corporation INTC to accelerate the availability of 5G in buildings. Jointly, they will work to deliver a virtual platform for Corning’s 5G network solutions powered by Intel Xeon Scalable processors and Intel FlexRAN Reference Software Architecture.

The initiative will likely create a path for mobile network operators and enterprise building owners to deploy 5G solutions that meet the performance demands of their customers and enable faster adoption of 5G applications.

Notably, a flexible and scalable infrastructure is required to realize the benefits of 5G that can evolve and adapt as fast as software-based applications. While fiber offers unlimited bandwidth, virtualization converts a traditional hardware challenge into a software-based solution. By fusing fiber and virtualization, Corning and Intel aim to exhibit the best in flexibility and scalability for in-building 5G infrastructure.

The strategic alliance combines Corning’s wireless connectivity portfolio and Intel’s cutting-edge technologies, including second-generation Intel Xeon Scalable processors, Intel FlexRAN 5G and 4G Reference Software, Intel FPGA Programmable Acceleration Card N3000, and 10/25/40Gb Intel Ethernet 700 Series Network Adapters to support 5G innovation as deployments increase worldwide. The new enterprise platform is expected to be commercially available in 2020.

Corning continues to outpace the market it serves, which underscores the resilience of its portfolio. The company is extending strong performance under its new 2020-2023 Strategy & Growth Framework. It is focusing on the portfolio and utilizing financial strength to enhance shareholder returns. Its capabilities are becoming increasingly vital to diverse industries, and multiple opportunities support leadership across its market-access platforms.

In the last earnings report, Corning’s net sales from Optical Communications segment (which accounts for the lion’s share of total sales) increased 6.5% year over year to $1,090 million, driven by hyperscale data center and optical fiber demand as well as sales from the 3M Communication Markets Division acquisition. The segment’s net income was $158 million compared with $150 million in the prior-year quarter.

Corning topped earnings estimates in the trailing four quarters, delivering average surprise of 3.7%. It is scheduled to report third-quarter earnings on Oct 29, before the opening bell. Over the past three months, shares of Corning have lost 11.2% compared with the industry’s decline of 3.4%.

Zacks Rank & Stocks to Consider

Corning currently has a Zacks Rank #5 (Strong Sell). A couple of better-ranked stocks in the industry include Altice USA, Inc. ATUS and Harmonic Inc. HLIT, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Altice surpassed earnings estimates in the trailing four quarters, the average surprise being 158.5%.

Harmonic surpassed earnings estimates in each of the trailing four quarters, the average surprise being 119.9%.

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