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After Corning reported October results, we updated our fair value and added the impact of memory pricing on consumer electronics demand to what we track. We also added the effects of US trade policy on solar product pricing as a new factor in our analysis. We have reset our expectations for how much the company must spend on factories as it builds ahead of current demand. Our review included an assessment of new multi-billion dollar contracts with major phone carriers that provide more certainty for future revenue.
Corning reported earnings of $0.91 per share, coming in higher than the $0.88 analysts expected. The standout was the optical fiber business, where sales grew 44 percent to $2.38 billion. Within that group, sales of products specifically for generative AI more than doubled compared to last year as big tech companies build out the data centers needed to run AI models.
The company is also making progress in its new solar glass business, which grew sales 37 percent. Management noted that new U.S. trade rules are helping the pricing environment for American-made solar parts. While the solar ramp-up is slightly slower than first planned, the core story remains the AI buildout, which is turning Corning into a primary supplier for the physical infrastructure of the internet.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Corning will share its latest financial results in about a week. Analysts expect the company to earn about 88 cents per share on roughly 5 billion dollars in revenue. The main thing to watch is the optical communications business. This unit makes the fiber optic cables that connect AI servers, and its growth will show if the massive spending on data centers is still translating into real orders for Corning's specialized glass.
Corning is working with Lumentum and Astera Labs to show off a new system for connecting AI server racks at the OCP Global Summit. The setup uses Corning's specialized glass fiber to carry data between chips, a task usually handled by copper cables.
As AI data centers get larger and more powerful, traditional copper wiring is reaching its physical limits because it generates too much heat and cannot carry data fast enough over long distances. By moving this connectivity to fiber optics, Corning is positioning its materials as the essential infrastructure for the next generation of AI hardware. This supports the view that Corning is becoming a primary beneficiary of the massive spending on AI data centers.
Source: Business Wire
Corning's board approved a dividend of $0.28 per share, which is the same amount it paid last quarter. This payment is scheduled for December 11 to anyone who owns the stock as of November 13. While this is a routine move, it shows the company is generating enough cash to keep returning money to shareholders while it spends heavily on building out fiber production for AI data centers.
Source: Business Wire
Management has a perfect record of beating their own targets for two years straight. This shows they set conservative bars and have a firm grip on the business even as AI demand accelerates.
| Expectation | |
|---|---|
| EPS | $0.98 |
| Revenue | $5.25B |