| From: Asymmetric | 2/11/2014 10:10:49 AM | | | | | | Corning Up Against a Glass Ceiling
Susquehanna says the glass and ceramics giant is hampered by price trends.
Corning (GLW: NYSE)
By Susquehanna Financial Group ($18.36, Feb. 10, 2014)
Following last Friday's analyst day, we believe Corning is positioned well for new growth opportunities. However, we remain on the sideline at the current share price given the glass-pricing trends and lack of upside to calendar 2014 earnings-per-share estimate.
Corning (ticker: GLW) held its annual investor meeting on Friday, Feb. 7, in New York City during which the company discussed its next-growth drivers including Willow glass (for flexible display app), new application for its Gorilla cover glass (while also arguing Sapphire is not a threat), Antimicrobial cover glass, and the Wireless Optical Distributed Antenna System (DAS).
In addition, Corning stated its key objectives for its main Display business, including bringing average sale price (ASP) decline to average trend line (by spring time frame), and better margin profile following the acquisition of Samsung's share in their joint venture. The company currently expects glass ASPs to decline at a higher-than-normal rate in the first quarter, but is optimistic to see the decline to return to moderate rate in the second.
Nonetheless, we currently see limited upside to our calendar 2014 EPS estimate of $1.42 versus consensus $1.45, and thus remain on the sideline at current share price.
We rate Corning at Neutral. Downside risk is $12, or 1.5 times forward enterprise value/sales to reflect a downturn.
In the Display business unit (33% of total fiscal 2013 revenue, accounting for 70%-plus of overall net-operating profit after tax (Nopat)): 1) stabilizing its Display business is Corning's key objective for FY14; 2) expect higher-than-normal glass ASP decline in the first quarter, but quarter-over-quarter ASP decline could return to normal trends by the second quarter; 3) competitors shutting down old glass capacities will positively impact glass supply/demand environment in the second-half of calendar 2014; 4) expect Lotus glass to capture growth in high-performance display (HPD) market, which is projected to grow at 35% compounded-annualized-growth rate (CAGR) from 2013 to 2017; 5) expect Willow glass to be finally commercialized for flexible displays application in the second-half of calendar 2014.
In Specialty Material, including Gorilla cover glass (15% of total revenue, 10% of overall Nopat): 1) expect Gorilla to return to growth in calendar 2014; 2) expect further cost reduction here to help improve margin profile; 3) Gorilla is adopted by automakers such as BMW, and Corning expects to expand into airplane and train markets; 4) near-term growth drivers for Gorilla are the increasing numbers of touch devices and larger average touchscreen size; 5) Corning does not expect much challenge from Sapphire since the company believes Gorilla is superior in performance, cost and weight; 6) new antimicrobial cover glass is a new and incremental growth driver.
In Optical Solutions (30% of total revenue, 10% of overall Nopat): 1) Corning's new revenue driver of One Wireless Optical DAS could capture the potential opportunity in the commercial building in the U.S.; 2) cloud computing, big data, data centers are driving demand for optical solutions; 3) Corning expects fiscal 2014 segment sales and profit of more than two times the telecom industry capital-expenditure rate.
In Environmental (12% of total revenue, 7% of overall Nopat): 1) several demand drivers are new regulations in China and EU could drive demand for regulated heavy-duty autos at 15%-20% CAGR until 2017 and, in North America, LEVII and Tier 3 regulations require 75% reduction in emission, and the new gasoline direct injection (GDI) engines require new filters that have a market size of $1 billion; 2) Corning expects Environmental gross margin to improve.
In Life Sciences (11% of total revenue, 4% of overall Nopat): 1) Corning expects double-digit profit growth here in calendar 2014 to reach $900 million (above our estimate of up 4% year-over-year); 2) the growth here is driven by increased content, e.g., per $1,000 in drug sales, Corning's potential sales is $33; 3) Life Sciences has provided relatively good returns given its low capital expenditures and research-and-development spending requirement; 4) Corning has no plan to spin-off Life Sciences. |
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| From: Asymmetric | 3/9/2014 3:28:26 PM | | | | | | Corning Stock Should Keep Grinding Higher
By STEVEN M. SEARS / Barrons March 6, 2014
The shares are a bet on wearable technology; this options trade boosts your return as the stock climbs.
A funny thing keeps happening to Corning : The stock continues to climb even though the company is as appealing to many investors as dinner with an IRS agent.
On Wednesday, the stock (ticker: GLW) rose to a 52-week high of $19.82 in the absence of any real news other than a day-old story about an accelerated share-buyback program.
This stock has been a favorite of the Striking Price since June 2012 when the stock traded around $13 and the company had just announced Willow Glass, an ultrathin, flexible product that bends like plastic. Since then, the stock has advanced some 53% amid widespread investor skepticism.
The stock has advanced despite a consensus view on Wall Street that Corning's dominant display business line, which accounts for about 33% of total fiscal 2013 revenue, was a major drag due to pricing troubles. Everyone already owns a flat-screen TV.
In the options market, where traders express their view of the future, trading patterns indicate expectations that Corning will set higher highs in the stock market.
The most widely owned contract is Corning's January $22 call that expires in 2016. That the May $19 put and May $20 put are the next most widely held positions is evidence that enough skepticism toward Corning's future still exists despite the rally. This is good.
If everyone agreed Corning's stock was the place to be, the stock would probably lose steam. Why? Because investors tend to go all in when they like a stock, and there's no money left to fuel further gains.
If you believe in wearable technology, which Corning's Willow Glass makes possible, it is not too late to still establish a position.
With the stock at $19.65, investors can sell Corning's August $18 put for 68 cents. If the stock dips below $18, investors are obligated to buy the stock or pay top-dollar to buy the put. Investors who want to build a position in the stock can buy the stock and sell the put.
Of course, it is hard to overlook the shadow Corning's display business casts over the company, but the stock keeps grinding higher, and that is a fact that is even harder to ignore. |
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| To: Asymmetric who wrote (2234) | 3/16/2014 12:40:08 PM | | From: Asymmetric | | | | Review: Corning's Thunderbolt Optical Cable
By Mikey Campbell / Apple Insider / Apple Insider
appleinsider.com
Already in its second generation, the Thunderbolt I/O protocol has been around for three years, but only recently did manufacturers begin production of optical cables to deliver the tentpole feature of long-distance data transfer. AppleInsider was able to test out this highly anticipated addition with Corning's 10m all-optical Thunderbolt cable solution.
After months of development, glass manufacturing giant Corning — which produces the Gorilla Glass used by Apple in its iOS product line — was first to bring an optical Thunderbolt cable to market late last year. With Optical Cables by Corning, the promise of long-distance high-speed interconnects, touted since the first-generation Thunderbolt-equipped computers hit store shelves in 2011, has finally been fulfilled. <snip> |
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| From: Asymmetric | 3/27/2014 12:14:13 PM | | | | | | Corning Still an Up-and-Comer
A multiyear TV-replacement cycle will boost earnings power.
Corning (GLW: NYSE)
By Susquehanna Financial Group ($20.06, March 26, 2014)
We are increasing estimates and the price target on Corning, and upgrading shares to Positive from Neutral.
Recent industry data points and Taiwan/Korea meetings last week have all been positive for Corning's GLW) TV operations, attributed to an improving economy/declining 4k2k (ultra-high-definition) premiums. We also hosted management meetings in New York Tuesday, with takeaways supportive of stronger earnings-per-share/free-cash-flow growth.
We are therefore increasing estimates and the price target and upgrading, despite Corning stock at a 52-week high. We argue share appreciation the past six months has had more to do with accelerated buy backs. And improving fundamentals should help with more upside from here especially as earning power improves (fueled by a multiyear TV-replacement cycle, margin expansion) while there is incremental confidence on free-cash-flow margin of 15% to 20%. The glass industry could also consolidate given poor balance sheets among competitors, helping with multiple expansion (recall the semiconductor-memory industry!). We are not as concerned on [manufactured] sapphire [a product that competes with Corning's Gorilla Glass] as we are with exchange rates though Corning is hedged through first-quarter 2015.
Given our revised view on fundamentals, we are using this opportunity to increase the calendar 2014 EPS estimate from $1.42 to $1.50 (consensus estimate is $1.45). Additionally, given our view that this is a multiyear TV-replacement cycle, we are using this opportunity to introduce our calendar 2015 EPS estimate of $1.75 (consensus estimate is $1.63). This has led us to increase our price target from $15 to $25, which is based on 14 times estimated calendar 2015 EPS, three times enterprise value (EV)/sales, nine times EV/earnings before interest, taxes, depreciation and amortization (Ebitda) and 1.7 times current book value.
The stock has over the past five years traded in a range of seven times-15 times forward price/earnings. The closest peer groups (LG Chemical [of Korea], Asahi Glass [of Japan]) are currently trading at 15 times forward price/earnings, one times EV/sales, five times forward EV/Ebitda and one times book value. We note Corning as of fourth-quarter 2013 had a net positive cash per share of $1.36 versus negative $4 for Asahi and negative $15 for LG Chemical. |
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| To: John Hayman who wrote (2232) | 3/30/2014 6:12:53 PM | | From: Asymmetric | | | | Forget Sapphire: Should Corning, Inc. Be More Worried About Plastic OLEDs?
By Steve Symington / The Motley Fool March 28, 2014
fool.com
Ever since GT Advanced Technologies (GTAT) signed a deal to supply sapphire material to Apple last November, the market has been flooded with speculation regarding exactly what the folks in Cupertino might be planning.
One of the more popular theories is that sapphire -- which is impossibly hard and nearly as scratch-resistant as diamond -- could eventually serve to replace Corning's Gorilla Glass as the protective cover of choice for Apple's various mobile devices.
While I've already made it clear I don't think that'll happen anytime soon, Corning management has still had their hands full of late rebutting pro-sapphire arguments while extolling the virtues of Gorilla Glass.
Here's an even bigger threat
But what would happen if a technology came along to render the glass portion of electronic displays unnecessary?
Wouldn't you know it, this tech already exists in the form of plastic-based organic light emitting diodes -- or, as they're more popularly known, P-OLEDs.
Plastic OLED prototypes from LG Display and Samsung. Source: LG Display/Samsung.
By mounting an OLED display on a plastic substrate, it can be made flexible and virtually unbreakable -- even able to withstand multiple strikes from a hammer. That's something neither Corning's products nor sapphire can offer.
Through license and material supply agreements with OLED specialist Universal Display (OLED) , regular OLEDs are already pervasive in today's market by their inclusion in Samsung's Galaxy series phones and tablets. In addition, both Samsung and fellow UDC customer LG Display (NYSE: LPL) have already introduced curved OLED televisions and smartphones to showcase OLED's early design possibilities.
Breaking the glass trend
However, each of the commercially available mobile OLED devices we've seen so far has used at least one of Corning's products for various purposes. These not only include Gorilla Glass as the protective cover, but also Corning's lesser-known Lotus Glass, which can be used for multiple purposes including the backplane, the touch sensor/barrier layer, and encapsulation to protect the OLED material from harmful outside elements.
Corning's ultra-slim, flexible Willow Glass can also be used to coat the otherwise-rigid touch sensor, but even then, it still wouldn't be considered unbreakable.
For now, entirely plastic-based devices seem to exist only as prototypes like the one Samsung demoed at last year's Consumer Electronics Show:
Even so, it appears the industry is continuing to make strides toward doing away with glass over the long run.
Back in January, for example, Samsung reportedly treated VIP attendees at this year's CES to a peek at a new foldable, plastic-based OLED smartphone featuring a flexible metal mesh touch sensor. While those reports stated Samsung was still ensuring the device would stand up to the thousands of folds a typical user would put it through, it could mean Samsung has found a viable alternative to using today's glass-coated ITO touch sensors.
What's more, Universal Display and LG Display have each developed their own proprietary flexible OLED encapsulation technologies. Samsung, for its part, appears to be evaluating competing encapsulation solutions from both Universal Display and manufacturing equipment specialist Veeco Instruments.
Finally, remember that earlier this year LG Display was rumored to have signed an exclusive agreement to supply 1.52-inch, flexible P-OLED displays for Apple's upcoming iWatch product. If that's true, Apple's long-awaited acceptance of OLED could spur the start of a broader movement toward flexible displays.
Corning might have an answer
Don't get me wrong; this doesn't mean Corning will sit back and let one of its more promising growth drivers fade away.
Just last month, Jim Clappin, president of Corning Glass Technologies, contrasted the manufacturing advantages of Willow Glass with the potentially wasteful methods employed with plastic displays:
Some device makers have pursued plastics as a path to achieve thinner displays. But use of plastic as a backplane substrate presents other challenges and trade-offs. Plastic substrates used a glass carrier to run through the panel making process and with the current technology, the carrier's lost after de-bonding. [...] On mature reusable carrier, Willow Glass can be processed using current panel manufacturing techniques. Once the backplane and color filter have been built on the Willow Glass surface and joined together the cell is then debonded from the carriers and carriers can be returned for reuse.
If you're having trouble picturing the process he described, here's graphical look provided by LG Display last month:
Source: LG Display.
In short, by allowing the carrier glass to be reused, Willow Glass could both save manufacturers money and improve their environmental footprint -- that is, at least, assuming plastic manufacturing capabilities don't evolve to save that carrier and negate his argument.
In addition, given Gorilla Glass' relative inflexibility, Willow Glass could also eventually be used not just as a substrate, but also as a new flexible cover material. This could allow Willow Glass to provide some level of scratch resistance, which simply couldn't be rivaled by plastic.
But there's another problem with Clappin's argument: It's not just about being thinner and cheaper. Willow Glass can still be broken much more easily than a comparable plastic display. Cost and environmental issues definitely need to be considered, but is the trade-off worth losing one of the most compelling reasons manufacturers are developing P-OLEDs in the first place?
If one thing is clear in the end, it's that Corning needs to remain aware of this risk. Plastic OLED displays could easily change the face of the electronics industry as we know it, and not everybody will benefit.
I plan on holding onto my shares of Universal Display for years to come, but that doesn't mean it's the only stock out there with huge potential. |
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| To: Asymmetric who wrote (2237) | 3/30/2014 6:18:05 PM | | From: Asymmetric | | | | Corning exec slams sapphire -- rumored for Apple device
by Brooke Crothers / CNET March 4, 2014
cnet.com
A Corning Glass executive does not think very highly of sapphire crystal as a protective material for displays. That was made crystal clear at a Morgan Stanley conference.
Sapphire crystal is used to protect the iPhone 5S camera lens and in the 5S' home button.
Apple
A Corning executive launched a blistering critique of sapphire crystal, used as a protective material for displays, on Tuesday. The subtext was obviously aimed at Apple.
In defense of its Gorilla Glass, Tony Tripeny, a senior vice president at Corning Glass, was asked the following question at the Morgan Stanley Technology, Media & Telecom Conference, via Seeking Alpha, on Tuesday. The question came from analyst James Fawcett of Morgan Stanley.
Note that the "one large handset and device maker" is unmistakably Apple. Apple is expected to use sapphire crystal in some way for future devices, possibly including a future iPhone and iWatch.
"So we mentioned Sapphire and obviously there is one large handset and device maker that people suspect maybe looking at Sapphire. And at least from a Corning perspective, [what are] the puts and takes of Sapphire versus glass?"
Tripney's response:
When we look at it, we see a lot of disadvantages of Sapphire versus Gorilla Glass. It's about 10 times more expensive. It's about 1.6 times heavier. It's environmentally unfriendly. It takes about 100 times more energy to generate a Sapphire crystal than it does glass. It transmits less light which...means either dimmer devices or shorter battery life. It continues to break. I think while it's a scratch resistant product it still breaks and our testing says that Gorilla Glass [can take] about 2.5 times more pressure that it can take...Sapphire on. So when we look at it, we think from an overall industry and trend that is not attractive in consumer electronics. “
And Morgan Stanley's Fawcett continued to ask more questions. Such as: "Sapphire...What's inherently more expensive about Sapphire? Is there something [about] the material or is this just a volume game? If you could bring up Sapphire production that...would drop the price significantly and be more competitive with Gorilla Glass?"
Tripeny's answer:
So from the last question, I will probably answer that first. Clearly, Corning has been in the crystal manufacturing business for a very long time, both directly and also through our joint venture, Dow Corning. So our knowledge of this has a lot to do with our knowledge about round crystal manufacturing. If it was a business that was attractive to enter into, we certainly would be able to do that.
On the first question, I think it's really a combination of three things. The formation takes about 4,000 times longer than Gorilla Glass at a significantly higher melting temperature. Its hardness makes machining more difficult and costly. Then the cost per unit increases exponentially because when you have defects in boundaries in the crystal growth process, you essentially cut them out. And so unlike glass, where we have developed technologies so that we can have [a] very large pristine pieces of glass, when you have that on crystals, what you end up doing is always having a yield issue. So it is really those items that make things more expensive. “
[ Also machining the material is difficult and costly due to its innate hardness] |
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| From: Asymmetric | 3/30/2014 6:32:33 PM | | | | | | Apple Inc.’s (AAPL) sapphire site the scene of frenzied construction, production, and expansion
by Rhian Hunt / Pfhub 03/28/2014
pfhub.com
The huge sapphire production facility that Apple is currently building in Mesa, Arizona, known by the name of “Project Cascade,” is already producing sapphire crystal as quickly as possible despite being only partly constructed. What is more, construction at the site is ongoing, and reports indicated today that the Cupertino firm is arranging contracts with construction firms to expand the facility before it is even completed, indicating that sapphire displays are likely to be used in large numbers, possibly for multiple products.
Intriguingly, the expansion is said to be related to a secret project, according to TechnoBuffalo, which would seem to indicate that another major product launch besides that of the iPhone 6 is planned for the near future. This project is clearly not small-scale, since the number of furnaces for creating sapphire boules to be sliced into displays jumped from a previous estimate of 950 to the current planned total of 1,700.
Apple screenThis represents a near-doubling of capacity, and though some of these furnaces are likely earmarked to make material that will be used for iPhone 6 displays, there is clearly a plenitude of manufacturing capacity on the docket. The partly completed and newly started facilities should all be fully constructed and operational by June. Bids are being requested from local construction firms, and Rosendin Electric and Graybar Electric will apparently be among those companies involved in powering the facility.
Tim Cook clearly mentioned the existence of a secret project at the annual shareholders’ meeting last month, but his words were vague enough to leave nothing but a cloud of speculation in their wake. A new size of iPhone (now confirmed as a reality) and the much rumored iWatch are two favorites as the item referred to in Mr. Cook’s statements. Nevertheless, there is a possibility that the “secret” is a true dark horse, something that nobody outside the secretive Apple (AAPL) offices even suspects. Suppressing rumors and leaks about such a project would be a monumental undertaking. Such exotic outliers as a full screen Apple television (iTV?) with a sapphire display or a radical new tablet or notebook design are not wholly out of the question, however.
Some clues about the possible uses of all this new sapphire capacity come from the material itself. Its chief advantage is that it cannot be scratched by steel, making a display fashioned from manufactured sapphire practically scratch-proof. Since the material is expensive to make – even with the money saving economies of scale expected from the Mesa plant – it makes sense to only put it where scratching is likely. This limits use to mobile devices, which may end up in a pocket, purse, or attache case along with other objects that could score their surfaces. A sapphire TV screen seems superfluous, since televisions seldom come in contact with loose change, keyrings, or pocket knives.
Regardless of the exact project planned, Apple (AAPL) clearly needs a lot of sapphire in a hurry. The partly constructed facilities in Mesa are already running at maximum possible capacity using a huge array of portable generators for temporary power. Steve Jobs’ brainchild does not take half measures, and investors will continue to watch developments as a sign of possible opportunities offered in the near future by product releases from the world-famous electronics giant.
- See more at: pfhub.com |
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| From: Asymmetric | 8/2/2014 9:48:35 PM | | | | | | Corning Watch: Is Corning ripe for takeover?
By Larry Wilson, Correspondent - StarGazette July 30, 2014
stargazette.com
Forbes writer speculates that Corning Inc. may be a takeover target.
Story Highlights
- Corning's high, free cash flow as well as proprietary products and low stock price may be attracting attention.
- Some speculate Apple Inc. could be among the suitors.
- Corning's institutional owners and its board would make the ultimate decision.
If you haven't had your nose buried in Forbes magazine this summer (and who has?), you might not know that one contributor to that publication has branded Corning Inc. as ripe for a takeover.
Author Gene Marcial says the Twin Tiers' largest employer is attracting attention for its high free cash flow, its proprietary products and its low stock price.
Marcial quotes Stephen Leeb, editor-in-chief of The Complete Investor:
"The right leadership could turn Corning into a dynamo, especially if it's broken up into parts. Although its business fundamentals aren't in their best position right now, the company has good turnaround potential ... So the odds of a takeover are clearly very high."
Leeb, also president of Leeb Investment Management in New York, thinks a buyer might sell or spin off the Fortune 500 company's liquid crystal display glass business — a big producer of free cash flow. That would produce a big windfall for investors and make the remainder of the company more attractive.
Some of this chatter is reminiscent of the Wall Street pressure placed on Corning in the late 1990s and early 2000s to become a "pure" fiber optics play. Then the collapse of the optical communications market proved how disastrous that strategy would have been.
Two of the potential suitors for a takeover of Corning whose names are being whispered in the market include Apple and Korea industrial giant. Private equity funds may also be interested.
Samsung, a former partner in Samsung-Corning Precision Glass, got a 7 percent stake in Corning Inc. when Corning bought out the partnership last fall.
Corning claims independence as one of its major values and would be hostile to any takeover attempt. The ultimate decision in any such situation would be made by the company's board of directors and its shareholders.
The shareholders with the clout to decide the issue are the institutional owners, not the individual investors with emotional ties to the company.
Such a decision would then be made on the basis of its economic value rather than its impact on the Corning community.
Some of the big investors who would play a major role in determining the outcome of a takeover bid include Vanguard, which owns 5.3 percent of Corning Inc., Dodge & Cox with 4.4 percent, State Street with 4.1 percent, Loomis Sayles with 4 percent and Black Rock with 3.2 percent.
Whether such a bid surfaces, in the long term or the short term, remains to be seen. |
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| From: Asymmetric | 8/2/2014 9:55:06 PM | | | | | | Corning Feels Pain of Weak Tablet Sales
Glass Screen Maker Cuts Its Tablet Outlook After Overestimating Market
By Anna Prior / WSJ July 29, 2014 3:25 p.m. ET
Corning maker of glass screens, became the latest company to feel the pain of slowing tablet sales, saying it had overestimated the market.
Shares fell 9.6% to $19.93 in midday trading as Corning's earnings were hurt in part by weaker-than-expected sales of its mobile-device display covers, called Gorilla Glass.
Known for making display glass used in high-definition televisions and fiber-optic gear, Corning also picked up on the smartphone boom with Gorilla Glass, a specially-treated display cover for touch-screen devices that resists scratching and breakage. However, Gorilla Glass has faced headwinds, with sales falling 17% last year as Corning worked through an inventory overhang after a bad bet on touch-screen laptops.
Corning on Tuesday made some significant reductions to its cover glass forecast for the year, specifically regarding the media tablet market, which it expects to only grow 8% to 10% this year.
"We just got that really wrong about what was happening in the tablet market, and we have adjusted down our forecast," Chief Financial officer James Flaws said on the company's quarterly conference call. He noted that lower-than-expected tablet sales was the reason for the reduced expectations for Gorilla Glass growth this year.
Enthusiasm for tablets has waned as smartphone screens grow larger and laptop computers grow thinner and lighter. Tablets aren't as essential to many users as smartphones, nor are they as portable. They don't handle many work chores as well as laptop or desktop PCs. And while many people watch videos or read articles on a tablet, it isn't quite a must-have device for many consumers.
As such, Apple last week said that unit sales of the iPad—the best-selling tablet on the market—fell for a second straight quarter, while recent evidence points to slowing sales for imitators that rushed their own tablets to market.
On Tuesday, Corning said sales for its specialty materials, which includes Gorilla Glass, rose 14% sequentially in the second quarter but still fell short of the company's expectations.
"We believe our Gorilla Glass sales reflect what happened in the smartphone and tablet markets in the first half of the year," said Mr. Flaws, adding that in the second-quarter, the company saw "evidence of disappointing sale through, which we believe contributed to our weaker sales into the supply chain."
Corning, which relies on sales of LCD-TV glass for the bulk of its profit, confirmed Tuesday that liquid-crystal display glass price declines in the quarter were more moderate than those in the first quarter.
The company's LCD glass volume, meanwhile, grew more than expected in part because of stronger-than-expected retail TV sales in Europe and South America, likely because of the FIFA World Cup, the company said. Corning said LCD glass volume rose in the low-teens percentage sequentially, compared with expectations of a high-single-digit percentage increase.
For the third quarter, Corning said it expects its LCD glass volume will be up by a mid-single-digit percentage sequentially, while price declines are expected to moderate further, returning to the rates experienced through most of 2013.
Overall, Corning reported a profit of $169 million, or 11 cents a share, down from $638 million, or 43 cents a share, a year earlier. Excluding acquisition-related costs and other items, core earnings per share rose to 37 cents from 32 cents.
Sales jumped 25% to $2.48 billion, while core sales rose 28% to $2.58 billion.
Analysts polled by Thomson Reuters predicted earnings of 38 cents a share on revenue of $2.53 billion.
Product costs rose 32%, and selling, general and administrative costs climbed 20%.
Cheap Tablets Crack Corning's Stock
By Dan Gallagher / WSJ July 29, 2014
Corning's high-profile Gorilla Glass business has slipped on a banana peel.
Corning shares slumped sharply Tuesday after the company reported quarterly earnings per share that missed Wall Street's consensus forecast by all of a penny. The selloff reflects in part a high valuation heading into the announcement: 13.7 times forward earnings, or 36% above the stock's five-year average, according to FactSet.
The main culprit for the miss was lower-than-expected sales in Corning's specialty-materials segment, which includes the Gorilla Glass cover material used in smartphones and tablets. On its conference call, the company singled out weakness in tablet demand, noting that the fastest-growing segment of this market is for lower-end devices less likely to use Gorilla Glass. Specialty-materials revenue increased 14% from the first quarter, well below the company's prior forecast of 20% to 25%.
The specialty-materials business accounts for only 11% of Corning's revenue, so some may deem the selloff an overreaction. The company's largest segment remains LCD glass used in large-screen TV sets and other products, and revenue from that business jumped 62% year over year while revenue from specialty materials was merely flat on that basis.
But perceptions of Corning's value have become closely identified with the popular Gorilla Glass brand, such that the business has an outsize effect on the company's stock.
Given the weakness in tablets, Corning will need successful launches of new smartphones—particularly the larger-screen iPhone 6 from Apple —to make its numbers for the third quarter. The company predicted a 10% sequential gain in specialty-materials revenue for the third quarter, which is a bit higher than the 8% gain it delivered in the same period last year that included the launch of the iPhone 5s.
But phones come with a catch: They use less display materials than tablets. So Corning must keep Gorilla Glass—and its stock valuation—balanced on a smaller footprint. |
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| From: Asymmetric | 11/7/2014 1:48:44 PM | | | | | | Scientist who developed CorningWare dies in NY
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Scientist who developed CorningWare, used in popular white casserole dishes, dies at 99
By David Pitt, Associated Press Nov 7, 2014
In this 1950 photo provided by Corning Inc., Dr. Don Stookey prepares to expose an image to ultraviolet light. Stookey, who forever changed cooking with the invention of CorningWare, died Tuesday, Nov. 4, 2014, at an assisted living center in Rochester, New York. He was 99.(AP Photo/Corning, Inc.)
DES MOINES, Iowa (AP) -- S. Donald Stookey was a young scientist researching the properties of glass in 1952 when he put a glass plate into an oven to heat it. But the oven malfunctioned.
Instead of heating to about 1,100 degrees Fahrenheit, the oven shot up to more than 1,600 degrees. Stookey expected to find a molten mess. Instead, he found an opaque, milky-white plate.
As he was removing it from the oven, his tongs slipped, and the plate fell to the floor. But instead of shattering, it bounced.
Stookey, who died Tuesday at 99, had just discovered glass ceramics — a breakthrough that soon led to the development of CorningWare, the durable, heat-resistant ceramic glass used to make millions upon millions of baked lasagnas, tuna casseroles and other potluck-dinner dishes.
Although he was never a household name, Stookey's best-known invention found a home in most American kitchens in the form of white dishes decorated with small blue cornflowers.
The space-age material was so strong that the military used it in guided missile nose cones.
Stookey died at an assisted-living center in Rochester, New York, said his son Donald Stookey. He said his father broke a hip in a fall a few months ago and underwent surgery, but his health deteriorated.
"He was one of the great glass scientists in the history of the world," said Steve Feller, a physics professor at Coe College in Cedar Rapids, Iowa, where Stookey earned an undergraduate degree in chemistry and mathematics and remained active in alumni activities. "Virtually everyone has had CorningWare at some point in time, and there were all sorts of spinoff applications from his fantastic work."
CorningWare was celebrated for its versatility. It was strong enough to withstand minor kitchen mishaps, and it gave home cooks the ability to bake and serve food in the same dish. The dishes could go straight from the oven to the dinner table and then into the refrigerator or freezer.
You could also put them in a microwave, and some types could be heated atop a stove. For decades, they were a common sight at family gatherings, church dinners and holiday feasts.
FILE- In this undated photo provided by Corning Inc., shown are pieces of CorningWare dishes. Dr. Do …
Stookey joined Corning Glass Works in New York in 1940, the same year he graduated with a doctorate in physical chemistry from the Massachusetts Institute of Technology. He immersed himself in research, studying the complex chemistry of oxidation and its effects on glass, according to a company biography.
Corning patented its glass ceramics as Pyroceram. By the end of the 1950s, CorningWare had become one of the company's most successful product lines.
"He was fearless — the unknown never daunted him," said David Morse, Corning's chief technology officer. "He was an unassuming and quiet but tough person," whose numerous inventions generated big businesses for the company. "Don was recognized throughout the glass technology community as a world-class scientist."
In a 2011 interview, Stookey said he initially viewed glass research as a way to make money, but he became intrigued by glass' special characteristics.
"I thought this might be a field where I could find something new, invent things not seen before, and I was lucky to have that be the case," he said in a video project funded by the History Channel for the Corning Museum of Glass.
Stookey held the patent on CorningWare, according to his son, who believes his father made money on a percentage of the sales but did not get rich.
In the late 1960s, the elder Stookey felt burned-out and out of ideas, the son said. He offered to leave the company. The family that started Corning told him to take a year off with pay. He traveled the world and returned to spend another 20 years with the company.
CorningWare is still sold today, although it is now marketed by World Kitchen LLC, a Rosemont, Illinois-based company formed after Corning Inc. spun off its consumer-products division in 1998.
Stookey earned 60 U.S. patents. His other innovations included developing photosensitive glass that helped lead to color television picture tubes.
He received the National Medal of Technology from President Ronald Reagan in 1987. In 2010, at age 94, he was inducted into the National Inventors Hall of Fame.
"Half of his life was being a professional, well-known scientist, and the other half was fully being a father to three of us kids, a family man and a good husband," Stookey's son said. "He took us hunting and fishing and on vacations around the country and around the world."
Stookey was born in Hay Springs, Nebraska, on May 23, 1915. His family moved from Nebraska to Cedar Rapids when he was 6. He graduated from Coe College in 1936 before earning a master's degree in chemistry from Lafayette College in Easton, Pennsylvania, followed by the MIT doctorate. |
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