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Technology Stocks : Corning Incorporated (GLW)
GLW 40.05+0.5%Jun 21 4:01 PM EDT

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From: Asymmetric1/11/2015 8:52:56 PM
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Growth Is the Gorilla in Corning’s Room
After a Strong Year, Corning’s Newest Innovations Will Be Needed to Keep Up Growth

By Dan Gallagher / WSJ - Heard on the Street Updated Jan. 11, 2015

Corning is unlikely to match 2014’s heady revenue growth this year. Associated Press

In a world of touch screens, germs may give Corning a shot at a new opportunity.

That is a good thing for the maker of specialty-glass products, which still makes most of its money from the volatile TV-display business. At last week’s Consumer Electronics Show, Corning showed off a new product called Iris Glass that is designed to reduce the thickness of a high-definition TV to something on par with today’s smartphones.

It also added an antimicrobial feature to its popular Gorilla Glass product. This uses ionic silver to fight contamination on the surface of the screen, or more simply, germs. Corning announced at CES that Clover Mobile will use the product in its point-of-sale terminals at retailers.

While early in their life cycle, these developments are important. Corning needs to stay at technology’s cutting edge as demand for touch screens and displays grows.

Corning has wrapped a strong year, thanks to big sales in its display unit. Analysts project total revenue grew 29% in 2014, its strongest year of growth since 2000.

Not that it is likely to maintain that pace. Current estimates have the company’s display-glass business staying flat in 2015, so revenue growth may have to rely on Corning’s other segments, including Gorilla Glass. And this business is also fickle, as more smartphone sales have shifted to lower-end devices that can’t afford premium components.

Corning reports year-end results later this month. The stock is up more than 24% since its last quarterly report and its forward price/earnings multiple is at just an 8% discount to that of the S&P 500. That is among its lowest discounts over the past five years.

To justify this, Corning will have to show that its latest innovations can actually drive further growth.
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