Corning Incorporated GLW is slated to report second-quarter 2020 results on Jul 28, before the opening bell. In the March-end quarter, the company delivered an earnings surprise of 17.7%. The bottom line surpassed the Zacks Consensus Estimate by 3 cents. Notably, Corning has a trailing four-quarter earnings surprise of 8.6%, on average.
The materials science innovator is expected to have recorded lower aggregate revenues on a year-over-year basis due to economic uncertainties stemming from the COVID-19 crisis. Corning is also facing challenges in broadly all of its business segments, particularly Optical Communications and Display Technologies.
Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.
Factors at Play
During the quarter under review, Corning reorganized its operating structure after extensive analysis and leadership review. Designed to unlock opportunities for valuable synergies, the revamped structure aligns executive management and business teams around five Market-Access Platforms. These are Mobile Consumer Electronics, Optical Communications, Automotive, Life Sciences and Display.
Corning executed a long-term purchase and supply agreement for its Valor Glass with Pfizer. Also, the company received $204 million from the Biomedical Advanced Research and Development Authority to expand its domestic manufacturing capacity of Valor Glass vials for COVID-19 vaccines. Such developments are likely to have had a positive impact on the company’s top line.
The Zacks Consensus Estimate for net sales in the Optical Communications segment is pegged at $806 million. The projected figure indicates a decline of 26% from the year-ago quarter’s reported figure, thanks to overall market weakness induced by customers’ project spending decisions. Net sales in Display Technologies are expected to be $685 million, which suggests a decline of 19.2% from the prior-year quarter’s reported figure. This resulted from lower glass volume and prices.
Net sales in Specialty Materials are estimated to be $303 million, which indicates a decline of 17.9% from the year-ago quarter’s reported figure. This was due to weak demand for premium glasses and advanced optics products. Net sales in Environmental Technologies are expected to be $200 million, which calls for a decline of 45.4% from the year-ago quarter’s reported figure. This was a result of vehicle manufacturers’ suspended production in key markets. Net sales in Life Sciences are projected at $258 million, which suggests a slip from $260 million reported in the prior-year quarter.
For the June-end quarter, the Zacks Consensus Estimate for aggregate revenues is pegged at $2,375 million that indicates a fall of 20.5% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 10 cents, which calls for a decline of 77.8% from the prior-year quarter’s recorded figure.
What Our Model Says
Our proven model doesn’t conclusively 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 0.00% as both are pegged at 10 cents.
Corning Incorporated Price and EPS Surprise
Corning Incorporated price-eps-surprise | Corning Incorporated Quote
Zacks Rank: Corning currently has a Zacks Rank #3.
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:
Community Bank System, Inc. CBU is slated to release second-quarter 2020 results on Jul 27. It has an Earnings ESP of +26.47% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NXP Semiconductors N.V. NXPI is scheduled to release second-quarter 2020 results on Jul 27. The company has an Earnings ESP of +11.90% and a Zacks Rank #2, at present.
Lincoln Electric Holdings, Inc. LECO has an Earnings ESP of +5.50% and a Zacks Rank of 2. The company is set to report second-quarter 2020 results on Jul 27.
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