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Will Higher Revenues Drive Corning's (GLW) Q4 Earnings?

Zacks Equity Research
·4-min read

Corning Incorporated GLW is scheduled to report fourth-quarter 2021 results on Jan 26, before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2 cents, the negative surprise being 3.5%.

Corning is expected to have recorded year-over-year higher aggregate revenues primarily driven by growth in the Optical Communications business.

Factors at Play

During the quarter, Corning introduced Velocity Vials — specially engineered Type I borosilicate vials externally coated with the company’s proprietary technology — which are helping drugmakers respond to the pandemic quickly. The increased efficiency and throughput enabled by Velocity Vials can drive faster manufacturing of COVID-19 vaccines, helping address industry supply chain challenges. Velocity Vials joined Corning Valor Glass vials and pharmaceutical glass tubing as the company’s newest innovation as Corning builds an end-to-end pharmaceutical packaging portfolio. Corning’s products have enabled the delivery of more than 3 billion doses of COVID-19 vaccines.

The Zacks Consensus Estimate for the Optical Communications segment’s net sales is pegged at $1,168 million. The figure indicates a rise of 19.7% from the year-ago quarter’s reported figure. The higher projection reflects sales growth in enterprise and carrier networks, driven by 5G, broadband and cloud computing.

The consensus estimate for Display Technologies sales is $932 million, which indicates a rise of 10.8% year over year. The performance is likely to have been driven by an increase in glass prices.

The consensus estimate for Specialty Materials sales is $523 million, which indicates a decline of 4% year over year. The performance is likely to have been hurt by volume declines in Gorilla Glass following builds supporting flagship product launches by customers.

The consensus estimate for Environmental Technologies sales is pegged at $385 million, which suggests a decline of 13.5%. The automotive industry has been significantly affected by the semiconductor chip shortage as OEMs extended shutdowns due to production constraints affecting Corning’s automotive sales.

The consensus estimate for Life Sciences sales stands at $308 million, which implies an increase from $274 million reported a year ago. This reflects ongoing demand to support the pandemic response, recovery in academic and pharmaceutical research labs and strong demand for bioproduction vessels and diagnostic-related consumables.

For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $3,610 million, which indicates growth of 8.5% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 51 cents, which suggests a decline of 1.9%.

What Our Model Says

Our proven model doesn’t 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. But 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 -4.59% as the former is pegged at 49 cents and the latter at 51 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

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Zacks Rank: Corning currently has a Zacks Rank #5 (Strong Sell).

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:

Tesla, Inc. TSLA is slated to release fourth-quarter 2021 results on Jan 26. Tesla has an Earnings ESP of +6.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex Pharmaceuticals Incorporated VRTX is scheduled to release fourth-quarter 2021 results on Jan 26. Vertex Pharmaceuticals has an Earnings ESP of +10.77% and a Zacks Rank #2.

Meritage Homes Corporation MTH has an Earnings ESP of +3.12% and a Zacks Rank #2. Meritage Homes is set to report fourth-quarter 2021 results on Jan 26.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report

Corning Incorporated (GLW) : Free Stock Analysis Report

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Zacks Investment Research