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Technology Stocks : Corning Incorporated (GLW)
GLW 45.62+1.3%Jul 12 4:00 PM EDT

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From: Asymmetric5/10/2015 2:26:06 PM
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Corning Watch: Balance keeps company on solid footing

LARRY WILSON, Elmira Star-Gazette May 8, 2015

Ever since Corning Inc. stared down bankruptcy early in this century, the company has kept a fund for a rainy day.

At the end of last year, that fund totaled $6.1 billion in cash and short-term investments. By the end of this year's first quarter, it had declined to $5.1 billion.

Is this a sign that the company is so confident about its future that it can allow its rainy day fund to dwindle? Or is it a sign that the lessons of past troubles have begun to fade as a new generation begins to take over the Fortune 500 company?

Actually, it's probably not either one. Corning's Chairman and CEO, Wendell Weeks, hasn't forgotten the early part of the last decade, when it appeared questionable whether he and others would keep their jobs.

They did and went on a single-minded crusade to better balance the Twin Tiers' largest employer so as to avoid allowing one business to threaten the existence of the company.

Generally, they have been remarkably successful. Corning Inc. was over-dependent on optical fiber and related components when the market for those products imploded.

It later became over-dependent on liquid-crystal display glass, which could have set the company up for another hard fall.

Today, however, Corning is better balanced than it has been in many decades.

Optical communications has recovered to provide a steady income from fiber-to-the-home and data center products.

Liquid crystal display glass has stayed strong, despite some challenges. Gorilla Glass, not used in displays but rather as a protective cover, has become a significant moneymaker.

Environmental products to cut emissions from cars and trucks show continued growth. Life Sciences keeps Corning on the cutting edge of bio-technology.

The rebalancing of Corning is the overarching achievement of Weeks and his team in the past five years.

Now, the collapse of a single segment of Corning's business, although it would be significant would not be catastrophic.

With the economic uncertainties and the potential geopolitical disruptions that lie ahead, corporations that rely principally on one product may find it difficult to survive.

Corning, on the other hand, has positioned itself to face the future without allowing a single business to dominate the company.

That may be one of the reasons why the rainy day fund has been allowed to shrink a little.

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