Yahoo Finance Will Top-Line Contraction Affect Corning's (GLW) Q1 Earnings?
Corning Incorporated GLW is scheduled to report first-quarter 2023 results before the opening bell on Apr 25. In the last reported quarter, the communication components provider beat the Zacks Consensus Estimate by 3 cents. Corning delivered a trailing four-quarter earnings surprise of 4.7%, on average. Despite introducing new products in the market, the company is expected to have recorded lower revenues year over year due to lower demand owing to inflationary pressure and macroeconomic uncertainties.
Factors at Play
During the quarter to be reported, Corning announced that Samsung — one of its biggest customers — is among the first companies to adopt its latest product, Gorilla Glass Victus2, in the upcoming Galaxy smartphones. The Gorilla Glass Victus 2 boasts improved drop and scratch resistance capabilities compared with the previous generation. The Gorilla Glass has been installed into more than 8 billion devices worldwide and the latest innovation is likely to expand Corning’s business. These developments are likely to have a positive impact on the company’s first-quarter earnings.
During the first quarter, Corning introduced the EDGE Distribution System, a pre-engineered data center solution to streamline operability and provide support for larger data processing. The Corning EDGE Distribution System is a cost-effective solution, combining several patch records into a single assembly. The system allows operators to install server cabling up to 70% faster and with less dependency on skilled labor. The solution minimizes the use of metal and plastic. The consolidation of cable also reduces the use of cable trays, materials and product packaging.
In the to-be-reported quarter, GLW unveiled an optical cable manufacturing campus in North Carolina to boost production and meet the rising demand for fiber broadband networks in rural regions. The new manufacturing hub will enhance network operators’ capabilities to provide high-speed, affordable fiber broadband networks in rural areas. Such initiatives are likely to get reflected in the upcoming results.
However, a challenging macroeconomic environment will likely impact Corning’s profitability. Corning lacks end market diversifications. A major portion of its revenues is generated from the Display and Optical segments. Against the backdrop of near-term uncertainty, consumers are likely to have remained cautious with their spending on smartphones, PCs and TVs. Rising input costs, higher shipment expenses and high customer inventory levels are likely to have hurt Corning’s top line in the first quarter.
For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $3,327 million, indicating a decline from the year-ago quarter’s figure of $3,744 million. The consensus estimate for adjusted earnings per share is pegged at 39 cents, suggesting a decline from the year-ago quarter’s tally of 54 cents.
Earnings Whispers
Our proven model predicts an earnings beat for Corning in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +3.71% with the former pegged at 40 cents and the latter at 39 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Corning Incorporated Price and EPS Surprise
Corning Incorporated price-eps-surprise | Corning Incorporated Quote
Zacks Rank: Corning has a Zacks Rank #2.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:
Verizon Communications Inc. VZ is set to release quarterly numbers on Apr 25. It has an Earnings ESP of +0.63% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for T-Mobile US, Inc. TMUS is +5.54% and it carries a Zacks Rank of 3. The company is scheduled to report first quarter numbers on Apr 27.
The Earnings ESP for Meta Platforms, Inc. META is +7.78% and it sports a Zacks Rank of 1. The company is scheduled to report first quarter numbers on Apr 26.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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