A month has gone by since the last earnings report for Corning (GLW). Shares have lost about 2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Corning due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

GLW Beats Q4 Earnings Estimates on Healthy Top-Line Improvement

Corning Incorporated reported solid fourth-quarter 2024 results, wherein adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across all segments except Environmental Technologies. The growing adoption of new optical connectivity products for GenAI (generative artificial intelligence) is a tailwind. Solid growth in free cash flow is a positive.

Net Income

On a GAAP basis, the company reported a net income of $310 million or 36 cents per share against a net loss of $40 million or a loss of 5 cents per share in the year-ago quarter. The significant improvement was primarily driven by top-line growth.

Core earnings for the reported quarter were $497 million or 57 cents per share, up from $339 million or 39 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by a penny.

For 2024, Corning reported a net income of $506 million or 58 cents per share compared with $581 million or 68 cents per share in 2023. Core earnings for 2024 improved to $1.7 billion or $1.96 per share from $1.46 billion or $1.70 per share in 2023.

Revenues

Net sales, on a GAAP basis, were $3.5 billion, up from $3 billion reported in the year-ago quarter. Solid traction in several verticals boosted net sales. Core sales were up 4% to $3.87 billion. The top line beat the consensus estimate of $3.77 billion.

Segment Results

Optical Communications generated $1.37 billion in revenues, up 51% year over year. Solid demand for new optical connectivity products for GenAI applications propelled net sales in the Enterprise vertical of this segment. The top line beat our estimate of $1.25 billion. Net income from this segment improved to $194 million from $88 million reported in the year-ago quarter.

Display Technologies registered $971 million in revenues, up 12% year over year led by higher product prices. Net sales beat our revenue estimate of $962 million. The segment’s net income was $262 million compared with the prior-year quarter’s figure of $232 million.

Net sales from Specialty Materials stood at $515 million, up 9% year over year, as demand for premium glass for mobile devices remained strong. The top line exceeded our estimate of $509 million. Net income for the segment was $81 million, up from $58 million a year ago.

Environmental Technologies contributed $397 million in net sales, down from $429 million in the year-ago quarter. The downturn was primarily attributable to soft global heavy-duty diesel markets, particularly in Europe. Net sales, however, beat our revenue estimate of $388 million.

Revenues from the Life Sciences segment were $250 million compared with the year-earlier quarter’s figure of $242 million. Segment net income was $18 million, up 6% year over year.

Hemlock and Emerging Growth Businesses reported a 5% growth in net sales year over year to $373 million. The segment reported a net loss of $10 million compared with a net loss of $19 million in the year-ago quarter.

Other Details

Quarterly gross profit increased to $1.2 billion from $911 million, with respective margins of 34.2% and 30.4%. Operating income was $393 million, up from $78 million in the prior-year quarter. Core gross margin was 38.6%, up from 36.9% in the year-ago quarter, owing to various productivity and pricing improvement actions across business operations.

Cash Flow & Liquidity

During the December quarter, Corning generated $623 million of net cash from operations compared to a cash flow of $713 million in the year-earlier quarter, bringing the respective tallies for 2024 and 2023 to $1.9 billion and $2 billion. As of Dec. 31, 2024, the company had $1.77 billion in cash in cash and cash equivalents with $6.88 billion of long-term debt compared with the respective tallies of $1.78 billion and $7.21 billion a year ago.

Outlook

For the first quarter of 2025, core sales are estimated at $3.6 billion. Core EPS is projected to be in the range of 48-52 cents.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Corning has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Corning has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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