Silicon Investor - Corning Incorporated (GLW)

[John Hayman] This year I went on a road trip and went through Corning NY. I spent some time ...

John Hayman — 11/19/2021 10:19:57 AM

This year I went on a road trip and went through Corning NY. I spent some time in the town, eating, observing, and conversing with locals. Afterwards , based on that visit to Corning, I sold my shares!!!

I made a profit on it, and some dividends, but I was not impressed with the future of the company. There was a lot of logic to apply for it to be a winner, but it never panned out as a good investment to me.

Good luck with them, I hope you make some money.

John

[Geomean] I'm new to Corning. It looked pretty good in a Better Investing Stock Selection ...

Geomean — 11/19/2021 9:13:57 AM

I'm new to Corning. It looked pretty good in a Better Investing Stock Selection Guide analysis. I'm looking for a message board with thoughtful discussion and analysis of the company. It's three year strategic plan is worth reading, especially relating to Corning's use of it's cash flow for innovation, capital expenditures, increasing shareholder dividends and stock buybacks.

Gorilla glass has been a great success. It's flexible Willow Glass has been mentioned in several scholarly papers relating to perovskite solar cells. Energy Materials Corporation in Rochester NY is building a roll to roll perovskite 100 M per hour production prototype using a monster (leased) Kodak roll to roll film deposition machine capable of producing 4 GW of solar cell material per year using Willow Glass as the substrate. Energy Materials says the production prototype machine is scaleable by 10X for each machine. It's received a 4 Million grant from the US Dept. of Energy for this work.

Willow Glass seems to be an excellent substrate for flexible solar cell production. Power Roll in England is doing similar work as EMC applying PV materials to flexible substrates. Power Roll's patents seem to be substrate agnostic as long as they are flexible enough to go around roller drums that have ports for material deposition. Corning is already in the top 10 worldwide in polysilicon production through it's 80% interest in Hemlock Semiconductor of Hemlock, MI. Apparently Willow Glass is much more durable than polysilicon.

Corning is worth some study.

[John Hayman] Hello, anyone out there in GLW ?? I can't believe that there hasn't been any po...

John Hayman — 11/25/2020 5:15:10 PM

Hello, anyone out there in GLW ?? I can't believe that there hasn't been any post on this board for four years. The stock price hasn't been on fire for sure, but there is a dividend that is small, but yet ???
Anyway, I am just keeping the subject alive.
John
go GLW , I hope !!!

[FJB] [youtube video]

FJB — 6/29/2016 3:20:27 PM

[Asymmetric] Corning Watch: Balance keeps company on solid footing LARRY WILSON, Elmira St...

Asymmetric — 5/10/2015 2:26:06 PM

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.

[JakeStraw] Corning's germ-fighting glass means you can touch an ATM with less worry cnet.co...

JakeStraw — 3/17/2015 11:06:04 AM

Corning's germ-fighting glass means you can touch an ATM with less worry
cnet.com

The special glass is just beginning to make its way into public displays such as ATMs and payment terminals, but Corning hopes it will eventually get into consumer electronics.

[Sidney Street] Friday's Investors Day slides available as PDFs, for all speakers. investor.shar...

Sidney Street — 2/7/2015 10:26:27 AM

Friday's Investors Day slides available as PDFs, for all speakers.
investor.shareholder.com
Faster than listening to hours of webcast archives.

[Asymmetric] Corning Inc. nears $10B sales goal Jeff Murray, jmurray@stargazette.com | @SGJ...

Asymmetric — 2/5/2015 3:25:01 AM

Corning Inc. nears $10B sales goal
Jeff Murray, jmurray@stargazette.com | @SGJeffMurray 4:15 p.m. EST January 27, 2015

Corning Inc. businesses performed well last year, according to numbers released by the company Tuesday.

Corning Inc. saw growth across the company in the fourth quarter and throughout 2014, according to sales and earnings figures released Tuesday.

Net sales were up 23 percent in the fourth quarter and net income was up 135 percent, according to Corning Inc.

For the entire year, net sales were up 24 percent and net income grew by 26 percent.

Company officials were most excited about sales numbers. Computed using Generally Accepted Accounting Principles, or GAAP, those sales totaled $9.7 billion.

Using figures that are adjusted to exclude the impact of changes in Japanese yen and Korean won foreign exchange rates, as well as other items that do not reflect ongoing operations of the company, that number is $10.2 billion.

Both numbers are milestones for Corning Inc.

"Our GAAP sales are still a record. We've never been close to $10 billion before," said Tony Tripeny, Corning Inc. vice president and corporate controller.

"We had a great fourth quarter. We ended up finishing with a really strong year. Every quarter was better than the comparable quarter of 2013. We feel this sets us up really well for 2015."

Earnings per share were 70 cents in the fourth quarter and $1.73 over the full year.

Using the adjusted numbers, Corning Inc. provided sales and earning figures for its major businesses:

•Display technologies: Sales were $1.1 billion in the fourth quarter, up 69 percent over 2013. Sales for the year were $4.4 billion, up 63 percent, driven by Corning Precision Materials sales.

•Optical communications: Fourth-quarter sales were $676 million, up 12 percent. Overall annual sales were nearly $2.7 billion, up 14 percent.

•Environmental technologies: Fourth-quarter sales were $250 million, up 5 percent. Annual sales were up 19 percent, driven by higher sales of heavy-duty diesel products.

•Specialty materials: Sales were $319 million in the fourth quarter, up 12 percent. Annual sales were up 3 percent.

•Life sciences: Fourth-quarter sales of $215 million were up 2 percent from a year ago. Sales were up slightly over the full year.

"You'll see a lot more (improvement). We haven't really seen the full benefit of Gorilla Glass 4 yet," said Dan Collins, Corning Inc. vice president of corporate communications.

Gorilla Glass 4, developed at Sullivan Park research facility, was launched in November.

The strong operating and financial performance will mean stability for the 5,200 Corning Inc. employees who work in the region, Tripeny said.

Independent analysts who follow Corning Inc. were also impressed by the company's 2014 performance.

"It's very good news. It more than met our expectations," said Angelo Zino, senior industry analyst with S & P Capital IQ in New York City. "Looking to the first quarter, the glass business is very healthy. Overall these are very good results. I think the outlook is pretty good."

Corning Inc. stock closed at $24.73 on Tuesday, up 82 cents, or 3.4 percent.

[Sidney Street] From SA: JPMorgan upgrades Corning, cites 4K TVs and Iris Glass Jan 15 2015, ...

Sidney Street — 1/15/2015 1:34:45 PM

From SA:

JPMorgan upgrades Corning, cites 4K TVs and Iris Glass

Jan 15 2015, 10:57 ET | About: Corning Inc. (GLW) | By: Eric Jhonsa, SA News Editor

JPMorgan's Rod Hall has upgraded Corning ( GLW +0.8%) to Overweight, and hiked his target by $5 to $26. His move comes a month after Citi's upgrade, and ahead of Corning's Jan. 27 Q4 report.Hall cites expectations of strong 4K/UHD TV growth - one of the factors behind Corning's Dec. 9 guidance hike - and the potential for the company's recently-launched Iris Glass (a light-guide plate solution for edge-lit TV sets) to boost 2016 EPS by as much as 6%.Corning is close to its 52-week high of $23.89, and trades for 15x 2015E EPS. The 2015 revenue growth consensus is at 2.2%.

[Asymmetric] Growth Is the Gorilla in Corning’s Room After a Strong Year, Corning’s Newest ...

Asymmetric — 1/11/2015 8:52:56 PM

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.

[Asymmetric] Corning Watch: Growing Corning Inc. with acquisitions LARRY WILSON, Corr...

Asymmetric — 12/26/2014 12:58:26 PM

Corning Watch: Growing Corning Inc. with acquisitions
LARRY WILSON, Correspondent 10:06 a.m. EST December 4, 2014

Corning Inc., the region’s largest employer, is growing with a series of acquisitions.(Photo: SIMON WHEELER / STAFF PHOTO)

There are a number of ways to expand a corporation like Corning Inc.

You can buy products you’ve never made before along with the technology to manufacture them. That was the basic strategy the Twin Tiers’ largest employer used in the 1990s to build huge businesses in medical blood testing and pharmaceutical development.

After proving to be more trouble than they were worth — in part because of complex government regulations — both businesses were dumped and Corning went back to its roots in glass.

Another way to expand is to grow sales of existing products without acquisitions. Corning Inc. has tried this method with products such as liquid crystal display glass, Gorilla Glass and optical fiber and cable.

Such “organic” growth is usually slow, except when a product gets hot for a short period of time. That has happened with several Corning products, all of which eventually cooled to more realistic levels. Among them: optical fiber, display glass and Gorilla Glass.

A third way to expand a corporation is to acquire businesses already related to successful products.

This seems to be the route that the Fortune 500 company has chosen.

Its largest recent acquisition came in the display glass business earlier this year. Corning bought out the interest of its Korean partner in Samsung Corning Precision Glass. That gave Corning Inc. a better foothold in Asia, a potentially high growth area for computer and television displays.

The $2.3 billion acquisition, which Corning financed by issuing new shares of preferred stock to Samsung, closed in January. It is expected to help drive Corning revenues to record levels this year.

On the heels of the Samsung display glass deal, Corning announced on Dec. 2 it will buy Samsung’s optical fiber business. The terms of the sale were not disclosed, but it is significantly smaller than the display glass deal and will produce significantly less revenue.

Its advantages are that it gives Corning increased access to the optical fiber markets in Korea and China, both of which have significant growth potential.

The two deals with Samsung followed Corning Life Science’s acquisition in 2012 of the majority of the Discovery Labware business of Becton Dickinson and Co.

The deal added new plastic consumable labware brands and other products to Corning’s existing portfolio.

The three deals done since 2012 in life sciences, display glass and optical fiber show that Corning Inc. has chosen augmenting existing product lines as its major strategy for growth. It will be a few years before the success of that effort can be accurately measured.

[Asymmetric] Corning Watch: Corning Inc. rewards shareholders . LARRY WILSON, Correspondent...

Asymmetric — 12/26/2014 12:54:41 PM

Corning Watch: Corning Inc. rewards shareholders
.
LARRY WILSON, Correspondent Elmira Star Gazette 10:56 a.m. EST December 10, 2014

stargazette.com

There was a time when Corning Inc. scoffed at dividends.

The company pointed out that most of its stockholders were pension funds, insurance companies or mutual funds. These institutional investors didn’t care about dividends, the Fortune 500 company said.

Instead, they wanted growth — in sales, profits and stock price.

In the early 2000s, as Corning Inc. slipped into one of the most challenging financial periods of its history, dividends dwindled.

Corning paid a quarterly dividend of 18 cents per share on June 1, 2000. As the optical communications business collapsed, so did the dividend of the Twin Tiers’ largest employer. It was first slashed by two-thirds, falling to 6 cents per share.

By July 2007 it had fallen to 5 cents per share, where it stayed until October 2011, when it rose to 7.5 cents.

So for most of the 2000s, the company stock price was depressed by the communications market collapse or the nationwide recession that began in 2008.

Investors, whether institutional or individual, got little in the way of price appreciation, little in the way of dividends and little in the way of growth. What exactly was the point of owning Corning Inc. stock?

That was the question that individual investors began to ask at annual gatherings of stockholders — sometimes in a whisper, sometimes in a shout.

The increase in the dividend to 7.5 cents a share in 2011 turned out to be a tipping point. Realizing that shareholders had pretty much been left out of any gains that Corning Inc. had made, the company began trying to make up for lost time.

It launched stock buyback programs and dividend increases in an effort to reward investors for their loyalty. By 2013, the dividend had risen to 10 cents per share.

From 2011 through early 2014, Corning repurchased $5.5 billion worth of its common stock. Much of that stock was issued in the early 2000s to raise money when the company’s income fell dramatically.

The new stock, however, diluted the value of Corning’s shares for long-term stockholders.

Now, Corning is at it again. It recently announced that the quarterly dividend will rise to 12 cents per share in the first quarter of next year and that it will buy back another $1.5 billion of its common stock by the end of 2016.

Corning Inc. is hoping the stock buybacks will help stabilize or drive up the price of its stock.

There is no sign that the new round of dividend increases and stock buybacks will be the last.

Wendell Weeks, company chairman and president, said improvements in operating performance could lead to bigger dividends and more share repurchases.

[Asymmetric] Chemical-Sensing Displays and Other Surprising Uses of Glass An inside look at...

Asymmetric — 12/26/2014 12:47:48 PM

Chemical-Sensing Displays and Other Surprising Uses of Glass
An inside look at Corning’s labs suggests what’s next for the inventor of Gorilla Glass.
.
By Kevin Bullis / MIT Technology Review on December 17, 2014

technologyreview.com

Someday your smartphone might be able to help you in a new way when you’re traveling: by telling you whether the water is safe to drink.

Although a water app isn’t close yet, researchers at Corning and elsewhere recently discovered that they could use Gorilla Glass, the toughened glass made by Corning that’s commonly used on smartphone screens, to make extremely sensitive chemical and biological sensors. It could detect, say, traces of sarin gas in the air or specific pathogens in water.

The sensors are just one project I learned about during a visit to Corning’s R&D labs in upstate New York. In the last few decades, Corning’s advances in glass-making have led to technologies such as fiber optics and flat-panel displays. Now, thanks to Gorilla Glass, it’s associated with the latest smartphones. But despite the remarkable success of that product, it is keen to catch the next high-tech boom.

Corning spends about 8 percent of its sales on R&D—which will amount to about $800 million this year. It’s a hedge against the very real possibility that one of its businesses could go dark—as has happened in the past. Between 2000 and 2002, Corning lost more than half of its revenue when its fiber-optics business collapsed with much of the rest of the telecom market. Its stock plummeted from $113 to just over $1. This year, it got another scare when one of its largest customers, Apple, came close to replacing Gorilla Glass in iPhones with sapphire (see “Why Apple Failed to Make Sapphire Phones”).

Displays, in one way or another, account for about half of Corning’s revenue, with roughly a third of that coming from Gorilla Glass. To expand this market and withstand challenges from other materials, Corning is trying to add capabilities to Gorilla Glass, such as the sensor application. And it’s looking for new markets for Gorilla Glass beyond displays.

The ability to turn your phone into a biological and chemical sensor is one of the earliest-stage projects in the lab. Researchers at Corning and Polytechnique Montreal discovered that they could make very high quality waveguides, which confine and direct light, in Gorilla Glass. The researchers were able to make these waveguides very near to the surface, which is essential for sensors. Doing so in ordinary glass would break it. Making the waveguide involves focusing a beam of intense laser light near the surface of the glass, then tracing it along the glass, which locally changes its optical properties.

To make a sensor, the researchers make a waveguide that splits into two identical pathways for light. Then the paths converge, and the light from both paths meet up. One path serves as the sensing path, and the other as a reference. Even a tiny change to the light in the sensing path—such as its intensity—can be detected by observing how the light from the two paths interacts when they meet, producing distinct patterns.

The researchers demonstrated a simple sensor that detects changes in temperature. Heating up the sensing path changes its shape, which changes the properties of the light passing through it. Because the waveguide is so close to the surface, part of the light actually extends out of the glass, and anything placed on the surface of the glass will interact with part of the light. This means that to make a chemical or biological sensor, you could prepare the surface of the glass so that a specific target will bind to it. For example, you might treat it with antibodies that latch onto E. coli. or other contaminants; detecting their presence would be as simple as putting a drop of water on the phone.

The waveguides are microscopically thin, and therefore invisible, so they wouldn’t obscure a display. And because they’re quite small, sensors for several different biological or chemical targets could be incorporated into a smartphone.

Corning researchers have also discovered that Gorilla Glass has useful acoustic properties. The way it vibrates is different than conventional glass—it damps sound waves. The simplest application is noise insulation—it blocks sound better than ordinary glass.

But the same acoustic properties could also turn displays into speakers. I saw such a prototype in one of Corning’s labs. A wire in the display attaches to a small actuator that vibrates the glass to produce sound waves. Because of the way the waves propagate through the glass, they can be more precisely controlled than with ordinary glass, allowing for higher quality sound reproduction.

In another lab, researchers showed off a seemingly ordinary window. Then, with a flip of a switch on a circuit board, it turned into a display—one showing an old Coke commercial—and I could only barely make out what was behind the image. When the ad was over, I could see through the display again. Corning was particularly secretive about how it managed to make this technology work.

The most uncanny thing I saw was a Slinky-like glass toy. It’s made of thin Gorilla Glass cut in a spiral shape with a new laser manufacturing tool. As with a Slinky, if you hold one part and let go of the rest, it extends toward the floor. Ordinary glass would just shatter, but because it’s tougher, this glass springs back like plastic. The key to having glass this flexible is making it thin.

Corning recently developed Willow Glass, which is about 100 micrometers thick, one-fourth the thickness of the Gorilla Glass normally used for displays. It can be shipped to customers in rolls, making it easier and cheaper to use in manufacturing. Potential customers are still evaluating how to use it; one likely application is as a component inside displays. But already, an even more flexible kind of glass is in development, says Corning’s chief technology officer, David Morse. It can fold around the edge of something as thin as a reporter’s notebook, and do so millions of times without breaking. It could be important in future foldable electronic devices.

Founded in 1851, Corning survived in the past because of its ability to keep reinventing the possibilities of glass. At about the same time that the market for fiber optics collapsed, its business selling glass for cathode-ray-tube TVs also took a steep dive. It was saved by a process it had invented for making the high quality glass needed for the transistors that control pixels in LCD displays—the very display technology that was destroying its cathode-ray business. A few years later, the company got a call from Steve Jobs, who needed tough glass for the first iPhone. Corning just happened to have a technology sitting on the shelf—the toughened glass that came to be called Gorilla Glass. Corning hopes to be ready for the next call.

[Asymmetric] The pioneering tech company you've probably never heard of John Lynch / The In...

Asymmetric — 12/17/2014 12:13:13 PM

The pioneering tech company you've probably never heard of
John Lynch / The Independent / Published 15/12/2014

independent.ie

Believe me, it's hard to be far away from the company we are perusing today. The company is called Corning and if you like to watch the telly, turn on the internet, cook a casserole, drive a car or indulge your compulsive interest in the revelations from the Hubble telescope, then Corning has already had a big bearing on your life.

Based in Corning, New York, and founded in 1851, the company's influence on technology began when it was asked to produce the glass envelope for Thomas Edison's light bulb. It has evolved into a global leader in specialised glass, ceramic and optical physics.

One would imagine that a company so ubiquitous would be tripping off every investors' tongue. The fact that this is not the case with Corning may be due tothe fact that its bewildering volume of sales are transacted with only a handful of customers. So, astute readers will conclude, it must have something to do with the mobile phone revolution or with the motor trade. To this I can only respond, well spotted!

Though around for a century and a half, the US firm now operates in five business areas; display technology, Corning optical communications, environment technology, specialty materials and life sciences. It has 70 plants in 15 countries employing 28,000 and has been behind innovations like thinner TVs and monitors. It also developed 'Lotus glass' for high performance portable devices such as smartphones.

The company is the largest LCD glass provider in the world; as a result its display technology business represents 32pc of Corning group sales last year and accounted for net income of $1.2bn. Four customers were responsible for 94pc of sales.

One of Corning's great inventions was optical fibre, an extraordinary product that's pound-for-pound stronger than steel, lighter than cotton, as thin as human hair and as flexible as silk.

Having first produced the optical fibre, it has built a large business in optical-based solutions for wireless networks, data centres and, of course, personal devices.

Another breakthrough for Corning was the development of an economic high performance ceramic that is the standard for catalytic converters in cars.

The company developed a ceramic solution, reducing car emissions by 99pc. Together with filter products for diesel and petrol applications, this forms the basis for Corning's environmental technology business. The business represents 12pc of Corning sales and while competitive, Corning's market position is stable, only three customers account for 87pc of sales.

Its specialised material business provides over 150 formulations for glass, ceramic glass and crystals with a variety of markets including aerospace, astronomy, ophthalmic and communications. It recently launched damage- resistant thin glass to protect screen displays. This business accounts for 15pc of sales, three customers' accounts for half its sales.

Corning life science business is a manufacturer and supplier of scientific lab equipment including vessels and surfaces used for microbiology, chemistry and bio-processing. Revenue from this business is $1bn but a recent purchase is expected to boost revenue and earning.

Sales last year were $8bn and group net income $2bn, up 20pc. Higher sales in optical and life science were offset by declines in display, environmental, technology and specialised materials. In response to global uncertainties, it implemented cost reductions and initiated a share buy-back scheme of $2bn. While investors are pleased with the increases in dividends, they still have some worries. Depending on so few customers (10 large clients provide 50pc of sales revenue) is the stuff of boardroom nightmares.

On the positive side, Corning is valued at $27bn, with a modest price earnings multiple of 12, a healthy financial position and a strong cash flow.

Its shares, trading in the low $20s, are up 35pc on the year and are worth watching.

[Asymmetric] Corning Rises On Upbeat LCD Glass Forecast By Teresa Rivas / Barrons / ...

Asymmetric — 12/9/2014 11:32:47 PM

Corning Rises On Upbeat LCD Glass Forecast
By Teresa Rivas / Barrons / Dec 9, 2014

Corning (GLW) shares were trading higher Tuesday on its optimistic outlook for fourth-quarter LCD glass volumes.

Speaking at ahead of an industry conference, Lisa Ferrero, head of the firm’s display technologies business, said that Corning expects global shipments for LCD glass in the low-single digits for the current quarter, up from previous guidance for a small decline, thanks in part to consumers’ strong appetite for TVs.

Ferrero also noted that Corning is anticipating declines in pricing to moderate next year.

Cantor Fitzgerald’s Brian White reiterated a Hold rating on the stock, but noted that Corning’s guidance is in-line with TV demand he found during the Black Friday weekend.

From his note:

For Corning’s Display business, the company expects 4Q:14 LCD glass to increase by a low-single-digit percentage QoQ and better than prior expectations for flat to down QoQ (we are projecting down 1%), while pricing (we are modeling down 3%) to moderate even more than expected in 4Q:14. Relative to our 4Q:14 model, we believe this updated LCD glass outlook can add approximately $65 million to our $1.075 billion Display sales forecast and $0.02 in total EPS upside. Display contributed 42% of Corning’s 3Q:14 sales and the core contributor of profits; however, the company provided no updates around the remainder of its business segments.

S&P Capital IQ’s Angelo Zino also reiterated a Hold rating on the stock: “GLW states that it now expects Q4 LCD glass market demand to increase sequentially in the low-single digits percentage range versus previous expectations for a slight decline. GLW also anticipates Q4 glass price declines to be more moderate than anticipated at the start of the quarter and shipments to be up in line with its market growth expectation. We believe supply conditions remain tight, driven by increasing screen size and shipments within the TV space. Heading into 2015, we remain optimistic about pricing/shipment trends but expect visibility to remain limited.”

The shares were up 2.3% at recent check.

Samsung to use Corning's new ultra-thin Gorilla Glass in next-gen phone

By Jennifer Booton / Reporter - (MarketWatch)
Published: Dec 9, 2014 9:02 a.m. ET

Samsung agreed to start using a new ultra-thin Corning Gorilla Glass in its newest-generation smartphone, the Galaxy Alpha. The glass, at just 0.4 millimeters thick, is the fourth-generation Gorilla Glass offered by Corning, bringing the total size of the Alpha to 7 mm. Corning says the new glass is the most damage-resistant cover glass in its pipeline, capable of dramatically improving screen protection when devices are dropped. The Alpha was initially announced in August with Corning's third-generation Gorilla Glass. Strong and thin screens have become an increasingly important feature for smartphone manufacturers. Consumers were disappointed when Apple bypassed GT Advanced Technologies' ultra-tough Sapphire glass in its new iPhone 6 this past September due to a production disagreement. Despite a broader selloff in the tech sector, shares of Samsung were up 2.5% recently. Those of Corning fell 1.7% premarket.

[John Hayman] Corning Announces Quarterly Dividend Increase of 20% and a $1.5 billion Share Re...

John Hayman — 12/3/2014 2:31:38 PM

Corning Announces Quarterly Dividend Increase of 20% and a $1.5 billion Share Repurchase Program

[Asymmetric] As Apple Pursues Sapphire, Corning Says It Made Even Tougher Gorilla Glass By...

Asymmetric — 11/20/2014 9:13:24 PM

As Apple Pursues Sapphire, Corning Says It Made Even Tougher Gorilla Glass
By Daisuke Wakabayashi / WSJ Nov 20, 2014

Corning whose Gorilla Glass is used iPhone displays, said it has developed a new version of the super-hard glass that aims to address broken or shattered screens from everyday drops.

The new version of Gorilla Glass comes as Apple’s attempts to use sapphire in its iPhone screens have hit an impasse with the bankruptcy of its one-time sapphire partner GT Advanced Technologies. Apple’s desire to prevent broken screens in its phones was the impetus behind a failed $1 billion investment in a mega-factory to produce massive amounts of the super-hard material.

In a press release, Corning said it dropped devices face down from one meter, or 39 inches, high onto a rough surface. It found that the new Gorilla Glass was up to two times tougher than competitive glasses. Corning said the new glass survived up to 80% of the time.

Gorilla Glass was instrumental in the development of the original iPhone. In the months leading up to the launch of the original iPhone, Steve Jobs reached out to Corning and asked it to start producing a super-hard glass for the device.

Originally developed in the 1960s for fighter-jet cockpits, Gorilla Glass allowed Apple to ditch its original plan to cover the iPhone in plastic.

[Asymmetric] Inside Apple’s Broken Sapphire Factory How $1 Billion Bet on iPhone Screens Fa...

Asymmetric — 11/19/2014 7:46:02 PM

Inside Apple’s Broken Sapphire Factory
How $1 Billion Bet on iPhone Screens Failed; The ‘Boule Graveyard’

By Daisuke Wakabayashi / WSJ Nov. 19, 2014

(background story on a Corning competitor)

Shortly before 7 a.m. Pacific time on Oct. 6, the chief executive of GT Advanced Technologies Inc. called an Apple Inc. vice president with bad news: GT, which was to supply Apple with superhard sapphire screens for its new iPhones, had filed for bankruptcy 20 minutes earlier.

The filing surprised Apple, because the companies had been negotiating changes in their contract to ease GT’s financial strain, according to a letter Apple later sent to GT’s creditors. Executives of the companies had planned to meet the next day at Apple’s headquarters.

A year earlier, Apple and GT had hailed a $1 billion plan to build an Arizona factory that would produce 30 times as much sapphire as any other plant in the world.

Instead, the alliance turned into a rare—and public—misstep for Apple, whose strict management of its global supply chain has helped it become the world’s biggest company by market value. From the making of the first iPhone in 2007, Apple repeatedly has pushed its suppliers to achieve the improbable, while driving hard bargains on price and time to market.

The Apple-GT marriage was troubled from the start. GT hadn’t mass-produced sapphire before the Apple deal. The New Hampshire company’s first 578-pound cylinder of sapphire, made just days before the companies signed their contract, was flawed and unusable. GT hired hundreds of workers with little oversight; some bored employees were paid overtime to sweep floors repeatedly, while others played hooky.

GT’s meltdown underscores the promise and peril for Apple suppliers. An Apple deal can generate billions in revenue. But it also means adapting to huge fluctuations in demand, at razor-thin profit margins and little room for error. “This is not easy money,” said an executive of a longtime Apple supplier in Asia.

GT Chief Operating Officer Daniel Squiller told the bankruptcy court that Apple had turned his company into a captive supplier, “bearing all of the risk and all of the cost.” GT couldn’t make a profit at Apple’s “dictated pricing,” he said.

Apple put blame for the deal’s failure “squarely at the feet of GTAT’s own management,” according to the letter to GT’s creditors, which Apple allowed The Wall Street Journal to review. “We never wavered from our commitment to make the project successful.”

The Cupertino, Calif., company turned to GT while seeking to solve a big problem with iPhones: scratched or broken screens. Sapphire is one of the hardest materials on earth, now typically produced synthetically, in furnaces that reach more than 3,600 degrees Fahrenheit. It also is expensive—more than five times the cost of glass.

Apple consumes one-fourth of the world’s supply of sapphire to cover the iPhone’s camera lens and fingerprint reader. Early last year, the company began looking for a much larger supply, to cover the iPhone’s screen.

GT made furnaces for producing sapphire. According to Apple’s letter to the creditors, GT told Apple in March of last year that it was developing a furnace that could produce a sapphire cylinder, known as a boule, weighing 578 pounds, more than twice as large as what were then the biggest boules. The larger boule would yield more screens, reducing costs.

GT said in its bankruptcy filings that Apple expressed interest in buying 2,600 of the new furnaces.

Around early summer, Apple switched gears and asked GT to make the sapphire. Apple didn’t want to pay GT’s typical 40% margin for the furnaces, a person close to GT’s operations said.

Apple also was having trouble finding a sapphire manufacturer. An executive at another company Apple approached last year said it couldn’t make a profit producing sapphire at the price Apple wanted.

Apple offered to lend GT $578 million toward building 2,036 furnaces and operating a factory in Mesa, Ariz. Apple would buy and retrofit the factory for an additional $500 million and lease it to GT for $100 a year.

GT was intrigued, because the agreement would provide more consistent revenue than equipment orders. Moreover, GT’s business making equipment for solar cells had fallen on hard times. GT’s 2013 revenue was down 66% from two years earlier.

On Oct. 31 of last year, GT and Apple signed an agreement, a few days after the first 578-pound boule emerged from a GT furnace. The cylinder was cracked so badly that none of the sapphire was usable, people familiar with Apple’s operations said.

GT said the quality would improve, and Apple was encouraged by GT’s track record of making successively bigger furnaces, the people said.

GT quickly set out to hire 700 staffers. Hiring moved so quickly that at one point in late spring, more than 100 recent hires didn’t know who they reported to, a former manager said. Two other former workers said there was no attendance policy, which led to an unusual number of sick days.

GT managers in the spring authorized unlimited overtime to fill furnaces with materials to grow sapphire. But GT hadn’t built enough furnaces yet, so many workers had nothing to do, two former employees said.

“We just kept sweeping the floors over and over,” one of the former employees said. “I just saw money flying out the door.”

Producing sapphire proved to be the biggest problem. It took roughly 30 days and cost about $20,000 to make a single boule. The people familiar with Apple’s operations said more than half the boules were unusable.

GT stored unusable cylinders in rows in an area of the Mesa factory that employees labeled the “boule graveyard,” people close to GT’s operations said.

Mr. Squiller, the GT operations chief, told the bankruptcy court that GT lost three months of production to power outages and delays building the facility.

Apple was responsible for building the facility to GT’s specifications and providing power. Apple told the creditors that GT failed because of “mismanagement,” not power interruptions.

Apple’s comments were “purposely misleading, out of context or inaccurate,” GT said in a brief statement for this article. “There is no point in engaging in a point-by-point debate on each issue.”

Late this April, Apple withheld the final $139 million it was supposed to advance GT, saying it hadn’t met the contract’s output or quality requirements.

GT said in its bankruptcy filing that Apple repeatedly changed specifications for the sapphire. The filing said GT spent $900 million—more than twice the $439 million Apple provided—to get the factory up and running.

On June 6, GT Chief Executive Thomas Gutierrez met with two Apple vice presidents in Cupertino to explain the production problems, according to Apple’s letter to the creditors. He presented a document titled “What Happened,” listing 17 problems, including improperly stocking the furnaces and creating problems by inadvertently changing a furnace design.

Mr. Gutierrez said he was there to “fall on his sword,” the Apple letter said. After the meeting, GT decided to stop producing 578-pound boules and make 363-pound cylinders to get the formula right.

GT spent $900 million—more than twice the $439 million Apple provided—to get the sapphire factory up and running. GT Advanced Technologies

When a boule was suitable, GT used a diamond saw to carve 14-inch thick bricks in the shape of Apple’s two new phones: the iPhone 6 and iPhone 6 Plus. Those bricks would be sliced lengthwise to make screens.

Manufacturing wasn’t the only problem. In August, one of the former workers said, GT discovered that 500 sapphire bricks were missing. A few hours later, workers learned that a manager had sent the bricks to recycling instead of shipping. Had they not been retrieved, the misfire would have cost GT hundreds of thousands of dollars.

By that point, it was apparent that sapphire wouldn’t be used for the screens on the new iPhones, which went on sale Sept. 19. Yet Apple still was eager to get as much sapphire as possible, the people familiar with its operations said. Apple’s letter said it only received 10% of the sapphire that GT originally promised.

The people close to GT’s operations said contractors for Apple applied quality standards inconsistently, sometimes accepting bricks that had been rejected a few days earlier.

In the first week of September, GT told Apple that it was having significant cash-flow problems. It asked Apple to pay the final $139 million loan installment and asked Apple to pay more for sapphire deliveries starting in 2015, one of the people familiar with GT’s operations said.

On Oct. 1, Apple offered to give GT $100 million of the $139 million loan installment and delay the repayment schedule, the people familiar with Apple’s operations said. Apple also offered to raise the price it paid for sapphire this year, to discuss raising it for 2015 and to relax exclusivity agreements so GT could sell furnaces to other customers, they said. The companies agreed to discuss the offer in person Oct. 7 in Cupertino.

Then came the early-morning Oct. 6 call, when GT chief Mr. Gutierrez told Apple that his company had sought bankruptcy protection. The people close to GT’s operations said executives hadn’t told Apple about the bankruptcy plan because they feared Apple would try to thwart them.

GT shares collapsed 93% on the news, wiping out roughly $1.4 billion in market value.

[Asymmetric] Scientist who developed CorningWare dies in NY . Scientist who developed Corni...

Asymmetric — 11/7/2014 1:48:44 PM

Scientist who developed CorningWare dies in NY
.
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.

[Asymmetric] Corning Feels Pain of Weak Tablet Sales Glass Screen Maker Cuts Its Tablet Out...

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.

[Asymmetric] Corning Watch: Is Corning ripe for takeover? By Larry Wilson, Correspondent - ...

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.

[Asymmetric] Apple Inc.’s (AAPL) sapphire site the scene of frenzied construction, production...

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

[Asymmetric] Corning exec slams sapphire -- rumored for Apple device by Brooke Crothers / ...

Asymmetric — 3/30/2014 6:18:05 PM

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]

[Asymmetric] Forget Sapphire: Should Corning, Inc. Be More Worried About Plastic OLEDs? By ...

Asymmetric — 3/30/2014 6:12:53 PM

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.

[Asymmetric] Corning Still an Up-and-Comer A multiyear TV-replacement cycle will boost ear...

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.

[Asymmetric] Review: Corning's Thunderbolt Optical Cable By Mikey Campbell / Apple Insider...

Asymmetric — 3/16/2014 12:40:08 PM

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>

[Asymmetric] Corning Stock Should Keep Grinding Higher By STEVEN M. SEARS / Barrons ...

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.

[Asymmetric] Corning Up Against a Glass Ceiling Susquehanna says the glass and ceramics gi...

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.

[John Hayman] NEW YORK (MarketWatch) -- Corning Inc. said on Wednesday that it earned $521 mil...

John Hayman — 10/24/2012 8:01:11 AM

NEW YORK (MarketWatch) -- Corning Inc. said on Wednesday that it earned $521 million, or 35 cents a share in the third quarter, compared to $462 million, or 30 cents a share a year ago. Sales in the quarter rose to $2.04 billion, from $1.91 billion a year ago. Analysts polled by FactSet Research had expected the glass company to earn 32 cents a share on revenue of $2.02 billion.

[Asymmetric] Glass Works: How Corning Created the Ultrathin, Ultrastrong Material of the Futu...

Asymmetric — 10/10/2012 1:22:21 AM

Glass Works: How Corning Created the Ultrathin, Ultrastrong Material of the Future
.
By Bryan Gardiner / Wired Magazine September 24, 2012
.
Molten glass cools to become so gummy it can be cut with scissors.

Don Stookey knew he had botched the experiment. One day in 1952, the Corning Glass Works chemist placed a sample of photosensitive glass inside a furnace and set the temperature to 600 degrees Celsius. At some point during the run, a faulty controller let the temperature climb to 900 degrees C. Expecting a melted blob of glass and a ruined furnace, Stookey opened the door to discover that, weirdly, his lithium silicate had transformed into a milky white plate. When he tried to remove it, the sample slipped from the tongs and crashed to the floor. Instead of shattering, it bounced.

The future National Inventors Hall of Fame inductee didn’t know it, but he had just invented the first synthetic glass-ceramic, a material Corning would later dub Pyroceram. Lighter than aluminum, harder than high-carbon steel, and many times stronger than regular soda-lime glass, Pyroceram eventually found its way into everything from missile nose cones to chemistry labs. It could also be used in microwave ovens, and in 1959 Pyroceram debuted as a line of space-age serving dishes: Corningware.

The material was a boon to Corning’s fortunes, and soon the company launched Project Muscle, a massive R&D effort to explore other ways of strengthening glass. A breakthrough came when company scientists tweaked a recently developed method of reinforcing glass that involved dousing it in a bath of hot potassium salt. They discovered that adding aluminum oxide to a given glass composition before the dip would result in remarkable strength and durability. Scientists were soon hurling fortified tumblers off their nine-story facility and bombarding the glass, known internally as 0317, with frozen chickens. It could be bent and twisted to an extraordinary degree before fracturing, and it could withstand 100,000 pounds of pressure per square inch. (Normal glass can weather about 7,000.) In 1962 Corning began marketing the glass as Chemcor and thought it could work for products like phone booths, prison windows, and eyeglasses.

Yet while there was plenty of initial interest, sales were slow. Some companies did place small orders for products like safety eyeglasses. But these were recalled for fear of the potentially explosive way the glass could break. Chemcor seemed like it would make a good car windshield too, and while it did show up in a handful of Javelins, made by American Motors, most manufacturers weren’t convinced that paying more for the new muscle glass was worth it—especially when the laminated stuff they’d been using since the ’30s seemed to work fine.

Corning had invented an expensive upgrade nobody wanted. It didn’t help that crash tests found that “head deceleration was significantly higher” on the windshields—the Chemcor might remain intact, but human skulls would not.

After pitches to Ford Motors and other automakers failed, Project Muscle was shut down and Chemcor was shelved in 1971. It was a solution that would have to wait for the right problem to arise.

When glass is hardened and strengthened it can withstand huge amounts of force from a lever press.

From above, Corning’s headquarters in upstate New York looks like a Space Invaders alien: Designed by architect Kevin Roche in the early ’90s, the structure fans out in staggered blocks. From the ground, though, the tinted windows and extended eaves make the building look more like a glossy, futuristic Japanese palace.

The office of Wendell Weeks, Corning’s CEO, is on the second floor, looking out onto the Chemung River. It was here that Steve Jobs gave the 53-year-old Weeks a seemingly impossible task: Make millions of square feet of ultrathin, ultrastrong glass that didn’t yet exist. Oh, and do it in six months. The story of their collaboration—including Jobs’ attempt to lecture Weeks on the principles of glass and his insistence that such a feat could be accomplished—is well known.

How Corning actually pulled it off is not.

Weeks joined Corning in 1983; before assuming the top post in 2005, he oversaw both the company’s television and specialty glass businesses. Talk to him about glass and he describes it as something exotic and beautiful—a material whose potential is just starting to be unlocked by scientists. He’ll gush about its inherent touchability and authenticity, only to segue into a lecture about radio-frequency transparency. “There’s a sort of fundamental truth in the design value of glass,” Weeks says, holding up a clear pebble of the stuff. “It’s like a found object; it’s cool to the touch; it’s smooth but has surface to it. What you’d really want is for this to come alive. That’d be a perfect product.”

Weeks and Jobs shared an appreciation for design. Both men obsessed over details. And both gravitated toward big challenges and ideas. But while Jobs was dictatorial in his management style, Weeks (like many of his predecessors at Corning) tends to encourage a degree of insubordination. “The separation between myself and any of the bench scientists is nonexistent,” he says. “We can work in these small teams in a very relaxed way that’s still hyperintense.”

Indeed, even though it’s a big company—29,000 employees and revenue of $7.9 billion in 2011—Corning still thinks and acts like a small one, something made easier by its relatively remote location, an annual attrition rate that hovers around 1 percent, and a vast institutional memory. (Stookey, now 97, and other legends still roam the halls and labs of Sullivan Park, Corning’s R&D facility.) “We’re all lifers here,” Weeks says, smiling. “We’ve known each other for a long time and succeeded and failed together a number of times.”

One of the first conversations between Weeks and Jobs actually had nothing to do with glass. Corning scientists were toying around with microprojection technologies—specifically, better ways of using synthetic green lasers. The thought was that people wouldn’t want to stare at tiny cell phone screens to watch movies and TV shows, and projection seemed like a natural solution. But when Weeks spoke to Jobs about it, Apple’s chief called the idea dumb. He did mention he was working on something better, though—a device whose entire surface was a display. It was called the iPhone.

Jobs may have dismissed green lasers, but they represented the kind of innovation for innovation’s sake that defines Corning. So strong is this reverence for experimentation that the company regularly invests a healthy 10 percent of its revenue in R&D. And that’s in good times and in bad. When the telecom bubble burst in 2000 and cratering fiber-optic prices sent Corning’s stock from $100 to $1.50 per share by 2002, its CEO at the time reassured scientists that not only was Corning still about research but that R&D would be the path back to prosperity.

“They’re one of the very few technology-based firms that have been able to reinvent themselves on a regular basis,” says Rebecca Henderson, a professor at Harvard Business School who has studied Corning’s history of innovation. “That’s so easy to say, and it is so hard to do.” Part of that success lies in the company’s ability not only to develop new technologies but to figure out how to make them on a massive scale. Still, even when Corning succeeds at both, it can often take the manufacturer decades to find a suitable—and profitable enough—market for its innovations. As Henderson notes, innovation at Corning is largely about being willing and able to take failed ideas and apply them elsewhere.

Glass starts out as a mixture of very fine powders like limestone, sand, and sodium borate.
Photo: Max Aguilera-Hellweg

The idea to dust off the Chemcor samples actually cropped up in 2005, before Apple had even entered the picture. Motorola had recently released the Razr V3, a flip phone that featured a glass screen in lieu of the typical high-impact plastic. Corning formed a small group to examine whether an 0317-like glass could be revived and applied to devices like cell phones and watches. The old Chemcor samples were as thick as 4 millimeters. But maybe they could be made thinner. After some market research, executives believed the company could even earn a little money off this specialty product. The project was codenamed Gorilla Glass.

By the time the call from Jobs came in February 2007, these initial forays hadn’t gotten very far. Apple was suddenly demanding massive amounts of a 1.3-mm, chemically strengthened glass—something that had never been created, much less manufactured, before. Could Chemcor, which had never been mass-produced, be married to a process that would yield such scale? Could a glass tailored for applications like car windshields be made ultrathin and still retain its strength? Would the chemical strengthening process even work effectively on such a glass? No one knew. So Weeks did what any CEO with a penchant for risk-taking would do. He said yes.

For a material that’s so familiar as to be practically invisible, modern industrial glass is formidably complex. Standard soda-lime glass works fine for bottles and lightbulbs but is terrible for other applications, because it can shatter into sharp pieces. Borosilicate glass like Pyrex may be great at resisting thermal shock, but it takes a lot of energy to melt it.

At the same time, there are really only two ways to produce flat glass on a large scale, something called fusion draw and the float glass process, in which molten glass is poured onto a bed of molten tin. One challenge a glass company faces is matching a composition, with all its desired traits, to the manufacturing process. It’s one thing to devise a formula. It’s another to manufacture a product out of it.

Corning is working on new flexible glass formulations that will ship on spools.
Photo: Max Aguilera-Hellweg

Regardless of composition, the main ingredient in almost all glass is silicon dioxide (aka sand). Because it has such a high melting point (1,720 degrees C), other chemicals, like sodium oxide, are used to lower the melting temperature of the mixture, making it easier to work with and cheaper to produce. Many of these chemicals also happen to imbue glass with specific properties, such as resistance to x-rays, tolerance for high temperatures, or the ability to refract light and disperse colors. Problems arise, though, when the composition is changed; the slightest tweak can result in a drastically different material. Throwing in a dense element like barium or lanthanum, for example, will decrease the melting temperature, but you risk not getting a homogeneous mixture. And maxing out the overall strength of a glass means you’re also making that glass more likely to fracture violently when it does fail. Glass is a material ruled by trade-offs. This is why compositions, particularly those that are fine-tuned for a specific manufacturing process, are fiercely guarded secrets.

One of the pivotal steps in glassmaking is the cooling. In large-scale manufacturing of standard glass, it’s essential for the material to cool gradually and uniformly in order to minimize the internal stresses that would otherwise make it easier to break. This is called annealing.

The goal with tempered glass, however, is to add stress between the inner and outer layer of the material. This, paradoxically, can make the glass stronger: Heat a sheet of glass until it softens, then rapidly cool, or quench, its outer surfaces. This outside shell quickly contracts while the inside remains molten. As the center of the glass cools, it tries to contract, pulling on the outer shell. A zone of tension forms in the center, while the outer surfaces are even more tightly compressed. Tempered glass will eventually break if you chip through this toughened outer compressive layer into the zone of tension. But even thermal tempering has its limits. The amount of strengthening you can achieve is dependent on how much the glass contracts upon cooling, and most compositions will shrink only modestly.

The interplay between compression and tension is best demonstrated by something called a Prince Rupert’s drop. Formed by dripping globs of molten glass into ice water, the quickly cooled and compressed heads of these tadpole-shaped droplets can withstand massive amounts of punishment, including repeated hammer blows. The thin glass at the end of the tail is more vulnerable, however, and if you break it the fracture will propagate through the drop at 2,000 miles per hour, releasing the inner tension. Violently. In some cases, a Prince Rupert’s drop can explode with such force that it will actually emit a flash of light.

Chemical strengthening, the method of fortifying glass developed in the ’60s, creates a compressive layer too, through something called ion exchange. Aluminosilicate compositions like Gorilla Glass contain silicon dioxide, aluminum, magnesium, and sodium. When the glass is dipped in a hot bath of molten potassium salt, it heats up and expands. Both sodium and potassium are in the same column on the periodic table of elements, which means they behave similarly. The heat from the bath increases the migration of the sodium ions out of the glass, and the similar potassium ions easily float in and take their place. But because potassium ions are larger than sodium, they get packed into the space more tightly. (Imagine taking a garage full of Fiat 500s and replacing most of them with Chevy Suburbans.) As the glass cools, they get squeezed together in this now-cramped space, and a layer of compressive stress on the surface of the glass is formed. (Corning ensures an even ion exchange by regulating factors like heat and time.)Compared with thermally strengthened glass, the “stuffing” or “crowding” effect in chemically strengthened glass results in higher surface compression (making it up to four times as strong), and it can be done to glass of any thickness or shape.

Engineers at Corning use an array of torture devices to test the limits of its products.
Photo: Max Aguilera-Hellweg

By the end of March, Corning was closing in on its formula. But the company also needed to manufacture it. Inventing a new manufacturing process was out of the question, as that could take years. To meet Apple’s deadline, two of Corning’s compositional scientists, Adam Ellison and Matt Dejneka, were tasked with figuring out how to adapt and troubleshoot a process the company was already using. They needed something capable of spitting out massive quantities of thin, pristine glass in a matter of weeks.

There was really only one choice: fusion draw. In this technique, molten glass is poured from a tank into a trough called an isopipe. The glass overflows on each side, then the two streams rejoin under the isopipe. It’s drawn down at a prescribed rate by rollers to form a continuous sheet. The faster it’s drawn, the thinner the glass.

Corning’s one fusion-capable factory in the US is in Harrodsburg, Kentucky. In early 2007, that plant’s seven 15-foot-tall tanks were going full blast, each churning out more than 1,000 pounds per hour of sold-out LCD glass for TV panels. One tank could meet Apple’s initial request. But first the old Chemcor compositions had to be reformulated. The glass not only needed to be 1.3 mm now, it also had to have better visual characteristics than, say, a pane in a telephone booth.

Ellison and his team had six weeks to nail it. To be compatible with the fusion process, the glass also needed to be extra stretchy, like chewing gum, at a fairly low temperature. The problem was, anything you do to increase a glass’s gooeyness also tends to make it substantially more difficult to melt. By simultaneously altering seven individual parts of the composition—including changing the levels of several oxides and adding one new secret ingredient—the compositional scientists found they were able to ramp up the viscosity while also producing a finely tuned glass capable of higher compressive stress and faster ion exchange. The tank started in May 2007. By June, it had produced enough Gorilla Glass to cover seven football fields.

In just five years, Gorilla Glass has gone from a material to an aesthetic—a seamless partition that separates our physical selves from the digital incarnations we carry in our pockets. We touch the outer layer and our body closes the circuit between an electrode beneath the screen and its neighbor, transforming motion into data. It’s now featured on more than 750 products and 33 brands worldwide, including notebooks, tablets, smartphones, and TVs. If you regularly touch, swipe, or caress a gadget, chances are you’ve interacted with Gorilla.

Corning’s revenue from the glass has skyrocketed, from $20 million in 2007 to $700 million in 2011. And there are other uses beyond touchscreens. At this year’s London Design Festival, Eckersley O’Callaghan—the design firm responsible for some of Apple’s most iconic stores—unveiled a serpentine-like glass sculpture made entirely from Gorilla Glass. It may even end up on windshields again: The company is in talks to install it in future sports car models.

Today, two yellow robotic arms grab 5-foot-square panels of Gorilla Glass with special residue-limiting suction cups and place them in wooden crates. From Harrodsburg, these crates are trucked to Louisville and loaded on a westbound train. Once they hit the coast, the sheets get loaded onto freight ships for their eventual date at one of Corning’s “finisher” facilities in China, where they get their molten potassium baths and are cut into touchable rectangles.

Of course, for all its magical properties, a quick scan of the Internet will reveal that Gorilla Glass does fail, sometimes spectacularly so. It breaks when phones are dropped, it spiders if they bend, it cracks when they’re sat on. Gorilla Glass is, after all, glass. Which is why a small team at Corning spends a good portion of the day smashing the hell out of the stuff.

“We call this a Norwegian hammer,” says Jaymin Amin, pulling a metal cylinder out of a wooden box. The tool is usually wielded by aircraft engineers to test the sturdiness of a plane’s aluminum fuselage. But Amin, who oversees all new glass development in the Gorilla family, pulls back the spring-loaded impact hammer and releases 2 joules of impact energy onto a 1-mm-thick piece of glass, enough to put a big dent in a block of wood. Nothing happens.

The success of Gorilla Glass presents some unique challenges for Corning. This is the first time the company has faced the demands of such rapid iteration: Each time a new version of the glass is released, the way it performs in the field has to be monitored for reliability and robustness. To that end, Amin’s team collects hundreds of shattered Gorilla Glass phones. “Almost all breakage, whether it’s big or small, begins at one spot,” says senior research scientist Kevin Reiman, pointing to a nearly invisible chip on an HTC Wildfire, one of a handful of crunched phones on the table in front of him. Once you actually locate that spot, you can start to measure the crack to get an idea of how the tension was applied to the glass; if you can reproduce a break, you can study how it propagated and attempt to prevent it, either compositionally or through chemical strengthening.

Armed with this information, the rest of the group jumps in to re-create that precise kind of failure over and over. They use lever presses; drop testers with granite, concrete, and asphalt surfaces; free gravity ball drops; and various industrial-looking torture devices armed with an arsenal of diamond tips. There’s even a high-speed camera capable of filming at 1 million frames per second to study flexure and flaw propagation.

All this destruction and controlled mayhem has paid off. Compared with the first version of the glass, Gorilla Glass 2 is 20 percent stronger (a third version is due out early next year).

The Corning composition scientists have accomplished this by pushing the compressive stress to its limit—they were being conservative with the first version of Gorilla—while managing to avoid the explosive breakage that can come with that increase. Still, glass is a brittle material. And while brittle materials tend to be extremely strong under compression, they’re also extremely weak under tension: If you bend them, they can break.

The key to Gorilla Glass is that the compression layer keeps cracks from propagating through the material and catastrophically letting tension take over. Drop a phone once and the screen may not fracture, but you may cause enough damage (even a microscopic nick) to critically sap its subsequent strength. The next drop, even if it isn’t as severe, may be fatal. It’s one of the inevitable consequences of working with a material that is all about trade-offs, all about trying to create a perfectly imperceptible material.

Back at the Harrodsburg plant, a man wearing a black Gorilla Glass T-shirt is guiding a 100-micron-thick sheet of glass (about the thickness of aluminum foil) through a series of rollers. The machine looks like a printing press, and appropriately, the glass that comes off it bends and flexes like a giant glimmering sheet of transparent paper. This remarkably thin, rollable material is called Willow. Unlike Gorilla Glass, which is meant to be used as armor, Willow is more like a raincoat. It’s durable and light, and it has a lot of potential. Corning imagines it will facilitate flexible smartphone designs and uber-thin, roll-up OLED displays. An energy company could also use Willow for flexible solar cells. Corning even envisions ebooks with glass pages.

Eventually, Willow will ship out on huge spools, like movie reels, each holding up to 500 feet of glass. That is, once someone places an order. For now, rolls of glass sit on the Harrodsburg factory floor, a solution waiting for the right problem to arise.

Bryan Gardiner (bgardiner@gmail.com) also writes about anatomical models made of borosilicate in this issue.

[Mad2] Nice article about GLW in Barrons today, citing their 20% dividend increase and ...

Mad2 — 10/6/2012 2:13:15 PM

Nice article about GLW in Barrons today, citing their 20% dividend increase and expected Qtr/qtr growth in revenue.
Their annual dividend of .36/share provides a 2.7% return based on Fridays close.
While they are still dependent on display glass, they have good potential upside in solar, health science and building materials (Dow-Corning JV)
Weeks is committed to increasing revenue from current 8 bil to 10 bil in 3 yrs.
At a trailing p/e of less than 10 this one is a no brainer.
Bottom is in.
BTW if as mentioned in Wed's debate Corp taxes get lowered to 25% that will provide additional gas to GLW and other blue chip stocks.
mad2

Barrons | SATURDAY, OCTOBER 6, 2012
Corning's Glass: Set to Sparkle By STEVEN M. SEARS
The options market is skeptical about the glass maker, but as an earnings report looms, the skeptical outlook merits its own skepticism. Also, pending super options may dent NYSE Euronext and Nasdaq OMX.
Corning declared a 20% increase last week in its quarterly common-stock dividend. The move should help secure the company's recently strong stock gains.

Corning (GLW) is up 12% in the past month, about three times the rise in the Standard & Poor's 500 index. We've liked the stock since June when we learned Corning had introduced Willow glass, a flexible substance that can be wrapped around objects and devices. Now Corning is preparing to report third-quarter earnings Oct. 24, and there is reason to be skeptical of the options market's skepticism.

Goldman Sachs analyst Simona Jankowski expects the company to report its first year-over-year sales growth in four quarters and first earnings-per-share gain in eight quarters.

Yet, the implied volatility of Corning's bearish put prices is elevated, reflecting investor concern that the shares will decline on the earnings report. In contrast, Corning's bullish call options, which increase in value if the stock rises, are inexpensive.

The skepticism creates opportunities for investors to sell bearish puts to position themselves to buy the stock at a lower price, and to buy bullish calls to participate in a potential earnings-led advance.

The fundamentals of liquid-crystal displays, used in flat-screen televisions, computer monitors, and the like are believed to be improving, if for no other reason than that LCD glass and panel makers are getting smarter about managing supply, which helps mitigate demand, or the lack thereof. Weak LCD fundamentals are a primary reason why Corning's stock shed 4% of its value in the past three years, as the S&P 500 rose 51%.

With Corning's stock at $13.38, Goldman Sachs' derivatives strategists are telling clients to buy the November $14 calls, recently at 30 cents, in anticipation that the stock will rise 7.2% on earnings. Aggressive investors who want to build a position in Corning should complement the call trade with a put sale. Premiums in near-month puts aren't high, but selling Corning's November $13 put for 49 cents looks reasonable. If the stock dips below $13, you own it, which isn't an unpleasant outcome.

[Jim Greif] seekingalpha.com Sounds good. Jim

Jim Greif — 6/21/2012 10:47:30 AM

[Asymmetric] Raise a Glass to Corning By STEVEN M. SEARS / Barrons / June 9, 2012 The c...

Asymmetric — 6/10/2012 7:37:38 PM

Raise a Glass to Corning

By STEVEN M. SEARS / Barrons / June 9, 2012

The company's revolutionary new product—flexible glass—and its low stock price make it a good candidate for selling puts.

Last Monday at an obscure trade show in Boston, Corning engineers announced they had developed flexible glass.

Willow Glass, as Corning calls its invention, is about as thick as a sheet of copy paper. It bends like plastic. A picture on Corning's Website shows a green-gloved hand bending Willow Glass into the shape of an upside-down U.

The malleability, and thinness, of the glass means it most likely will be used to make smartphones and tablets thinner and lighter. The glass can even be wrapped around devices or structures. Already, Corning's Gorilla Glass is used in 750 million devices, including the Galaxy S III smartphone from Samsung (005930.Korea). Apple's (AAPL) iPhones also reportedly use Gorilla Glass. Maybe Corning's customers will use Willow Glass in new devices.

ALTERING THE BASIC NATURE of glass seems like an epic milestone with limitless possibilities. Yet Corning's stock (ticker: GLW) has barely budged since the news was released at the Society for Information Display's meeting in Boston. The yawn shows how little investors think of Corning. Shares are down 3% in the past month, and down 30% in the past year.

The possibilities of Willow Glass, coupled with Corning's somnolent stock price, are alluring. It could take several years for the Willow Glass investment thesis to blossom, but the risk is mitigated by the stock's 2.4% dividend yield. The dividend is dependable. It could be increased.

At around $13, Corning's stock is so inexpensive that it can easily be bought by almost anyone. But investors can enhance the purchase by selling puts.

With the stock at $12.83, investors could sell Corning's January $12.50 put to collect $1.31. If the stock slides below $12.50, and the stock was put to investors, they would buy it at an effective price of $11.19. The stock's 52-week low of $11.51 was set last October. If the stock advances, the money received for selling the put can be kept.

Corning is involved, however, in other businesses besides its so-called display technologies operation, and poor performance in any of those could sour the stock. In 2011, display technologies represented 40% of Corning's sales, even though it is the largest of the company's five main business units. And the unit has some major competitors, including Asahi Glass (ASGLY), Nippon Electric Glass (5214.Japan) and AvanStrate (5220.Japan).

BUYING A STOCK WITH GOOD prospects at a low price always seems attractive. The risk never seems great—but this trade has risks. If Corning's shares turn sharply lower, anyone who sold the put is buying the stock at the put's $12.50 strike price even if the stock is at $5. In January, Corning's stock slid sharply when fourth-quarter earnings revealed glass prices declined.

Business seems to be improving, or at least stabilizing, based on late April's first-quarter earnings. Corning is expected to report earnings July 22, which could provide an important opportunity to highlight how Willow Glass represents a new chapter for the company and smartphones, TVs, and tablets like Apple's iPad.

Even if the Willow Glass trade thesis proves wrong, the sting is offset by Corning's 2.2% dividend yield. In essence, investors can park cash in a relatively low-risk stock whose yield exceeds the 10-Year-Treasury's 1.5%.

Should Corning disappoint investors yet again, shareholders probably will pressure management to use its $3.7 billion cash pile to increase the dividend and buy back shares. The cash equals about 19% of the company's $19.5 billion market capitalization, and spending just a fraction of the cash pile could convince almost any investor that Corning's glass is half full.

>>>>>>>>>>>>>>>>>>>>>>>>

Willow Glass: ultra-thin glass can 'wrap' around devices

BBC News / June 5, 2012

bbc.com

The new glass could be both for rigid and flexible displays

A new type of flexible ultra-thin glass has been unveiled by the firm that developed Gorilla Glass, currently used to make screens of many mobile devices.

Dubbed Willow Glass, the product can be "wrapped" around a device, said the New York-based developer Corning.

The glass was showcased at the Society for Information Display's Display Week, an industry trade show in Boston.

Besides smartphones, it could also be used for displays that are not flat, the company said.

But until such "conformable" screens appear on the market, the glass could be used for mobile devices that are constantly becoming slimmer.

"Displays become more pervasive each day and manufacturers strive to make both portable devices and larger displays thinner," said Dipak Chowdhury, Willow Glass programme director at Corning.

The prototype demonstrated in Boston was as thin as a sheet of paper, and the company said that it can be made to be just 0.05mm thick - thinner than the current 0.2mm or 0.5mm displays.

The firm has already started supplying customers developing new display and touch technology with samples of the product.

Next-gen gorilla glass?

The material used to make Willow Glass is the result of the firm's glassmaking process called Fusion.

The technique involves melting the ingredients at 500C, and then producing a continuous sheet that can be rolled out in a mechanism similar to a traditional printing press.

Corning unveiled Gorilla Glass 2 at CES this year, saying that it will make screens thinner

This roll-to-roll method is much easier and faster for mass production than the sheet-to-sheet process normally used to make super-thin glass, the firm said.

In future, Willow Glass may replace the already widely-used Gorilla Glass, found on many smartphones and tablets.

At this year's CES trade show in Las Vegas, Corning unveiled Gorilla Glass 2, said to be 20% thinner than the original product but with the same strength.

The first-generation of Gorilla Glass, launched in 2007, has so far been used on more than 575 products by 33 manufacturers - covering more than half a billion devices worldwide.

It was first spotted by the Apple founder Steve Jobs, who contacted Corning when the firm was developing the screen for its first iPhone in 2006.

Other developments

Willow Glass is not the first attempt to produce a futuristic flexible display.

During the past few years, scientists around the world have been working with a material called graphene, first produced in 2004 - a super-conductive form of carbon made from single-atom-thick sheets.

Canadian and US researchers developed prototype of a flexible smartphone in 2011

In a past interview with the BBC, a researcher from Cambridge University, Prof Andrea Ferrari, said that prototypes of flexible touchscreens made out of graphene have already been developed - and that besides being ultra strong and flexible, in future such displays could even give the user "sensational" feedback.

"We went from physical buttons to touch screens, the next step will be integrating some sensing capabilities," said Prof Ferrari.

"Your phone will be able to sense if you're touching it, will sense the environment around - you won't have to press a button to turn it on or off, it will recognise if you're using it or not."

In a separate project, scientists from the Human Media Lab at Queen's University, Canada, and Arizona State University's Motivational Environments Research group, created a millimetres-thick prototype flexible smartphone in 2011, made of a so-called electronic paper.

The scientists said they used the same e-ink technology as found in Amazon's Kindle e-book reader, bonded to flex sensors and a touchscreen that interpreted drawings and text written on it.

"This computer looks, feels and operates like a small sheet of interactive paper," said one of the researchers, Dr Roel Vertegaal.

"You interact with it by bending it into a cell phone, flipping the corner to turn pages, or writing on it with a pen."

[Asymmetric] CORNING SHAREHOLDERS MUST FEEL as if they have walked barefoot over broken glass...

Asymmetric — 4/22/2012 11:35:53 AM

CORNING SHAREHOLDERS MUST FEEL as if they have walked barefoot over broken glass. Since hitting a high above $23 about 12 months ago, the stock has fallen 40% to $13.84, even as the market has risen 4%.

[Note: Barrons - Vital Sign Column from Feb 18, 2012. Corning settled at $13.18 Friday. This analysis still holds]

The company operates five major divisions, but the problem is centered in the display-technologies segment, which provides almost 90% of profit. Corning (GLW) is one of the biggest suppliers of glass used in screens for notebooks, PC monitors and televisions. Its smaller specialty-materials division makes glass for smartphones, tablets and other portable devices.

The stock fell last year on a significant slowdown in the global display-glass market. Though 2011 revenue rose 19% to $7.9 billion, fourth-quarter sales dropped 9% sequentially. More importantly, quarterly gross profit margins fell to 43.7% from 47.1% in the third quarter. Worse, the company is predicting "double-digit" price declines and more margin compression in the first half of 2012 before glass prices are expected to stabilize. After that, Corning expects flat display sales and earnings through 2014.

This comes as Corning's competition has increased glass capacity while customers are tightening their inventories, due to lower retail demand for such things as TVs. In 2011, earnings—also hurt by significantly lower profits from affiliates, higher taxes, and special items—fell to $2.8 billion or $1.77 per share, from $3.6 billion or $2.25 per share, in 2010.

The bear case says it's over for Corning. In general, unit sales of TVs, which use lots of glass by area, are slowing—though sales of the biggest flat-screen TVs are still growing. Heavy competition and lower margins are a permanent part of a new industry landscape.

All the pessimism would get a better hearing here if Corning were taking this lying down. It isn't. Corning is already cutting display capacity by 25%. And with demand for smartphones and tablets growing nicely, the company will be well-served by its R&D leadership in many of the industries in which it competes.

It has other levers to reduce shareholder pain. Higher dividend payouts—Corning yields 2.2%—and increased share buybacks are on the way.

While the shares probably will have a rocky first half, most of the risks appear to be already in the stock, which trades at a price/earnings ratio of nine. Even with earnings at $1.25 a share—a 10% haircut to the current 2012 consensus analyst estimate of $1.40—Corning trades at less than 11 times. On that and other valuation metrics, the stock is closer to historic lows than highs.

Corning is an industrial firm, but its shares trade like bank stocks these days— at less than tangible book value. The company's ratio of debt to total capital is 10%, which gives it flexibility and a strong edge against competitors. Meanwhile, Corning holds cash equal to nearly 30% of its stock-market value.

"I'm encouraged by the way they are handling the challenge," says James Hardesty, of Hardesty Capital Management, which owns Corning shares. Capital spending will be cut dramatically, by about $600 million, to $1.2 billion to $1.3 billion next year. And at less than book value, any share buybacks will be "automatically accretive to earnings."

Another Corning fan, Alan Lancz, who runs Alan B. Lancz & Associates, expects two more quarters of weakness, and advises investors to capitalize on them by buying shares. Lancz began adding shares to his firm's holdings in early February. As Apple and other smartphone and tablet makers introduce new products, Corning's momentum will build, he contends. Lancz looks for the stock to be in the $20s again in two to three years.

This seems like a good entry point for patient investors with a horizon of one year or more. As Corning works its way out of this jam, investors will get more comfortable with the company, and its stock will rebound.

[Asymmetric] Hon Hai's Sharp Deal Good for Corning Corning provides glass for the plant tha...

Asymmetric — 3/28/2012 9:26:24 AM

Hon Hai's Sharp Deal Good for Corning
Corning provides glass for the plant that Hon Hai will take control of.

Sterne, Agee & Leach March 27, 2012

Hon Hai Precision Industry's stake in Sharp is a positive for Corning.

We do not think that Hon Hai's (ticker: HNHPF) investment in Japan's Sharp will change the demand outlook for liquid-crystal-display (LCD) panels. However, here are four things to highlight.

1) The Sakai City plant was designed to be Sharp's most efficient LCD panel plant in the world. We therefore believe that Sharp will be motivated to drive utilization higher at this plant relative to its others.

2) Corning (GLW) provides 100% of the glass requirements for the Sakai City plant. To the extent that utilization trends higher at the plant would be a positive for Corning.

3) From Sakai City, Corning does take some of its 10G glass and slices it into 8G glass for shipment to other panel makers. To the extent that this happens less would be a positive for Corning.

4) To the extent that Hon Hai's LCD panel purchases move in favor of Sharp Sakai City (where Corning has 100% share) and away from LG Display (where Nippon Electric Glass has dominant share and Corning has the least share) would be a positive for Corning.

Sharp announced that it will enter into a strategic partnership with Hon Hai. Sharp will issue shares to Hon Hai worth about $800 million. In exchange, Hon Hai will take half of Sharp's 93% stake in its Sakai City LCD plant. Before the investment, Sharp owned 93% of the plant, and Sony (SNE) owned 7%. After the investment, Sharp will own 46.5%, Hon Hai will own 46.5%, and Sony will own 7%. Ultimately, Hon Hai will procure up to 50% of the large-size LCD panels and LCD modules from the plant.

Sharp's LCD panel plant in Sakai City (where we visited a few weeks ago) is its state-of-the-art, flagship operation -- the newest, most environmentally friendly (LED lighting everywhere), and most efficient plant within Sharp. Co-located at the Sakai City plant are glass makers (Corning) and color filter makers (Toppan and Dai Nippon Printing). Sharp also has a solar-panel facility on-site.

[Mr. Sunshine] John, thanks, Corning must be employing a whole graduating class of lawyers. I ...

Mr. Sunshine — 3/26/2012 8:55:43 PM

John, thanks, Corning must be employing a whole graduating class of lawyers. I assume the liability risk is not as drastic as it sounds, but you can bet that when those issues are resolved, even if not entirely in GLWs favor, the stock will spike as the uncertainty is removed.

[Mad2] Here is the section titled "Legal Proceedings" from GLW's 2011 Annual Report. Th...

Mad2 — 3/22/2012 8:58:39 PM

Here is the section titled "Legal Proceedings" from GLW's 2011 Annual Report.
The key points are contained in the last two sentences.
mad2

Legal Proceedings

Environmental Litigation. Corning has been named by the Environmental Protection Agency (the Agency) under the Superfund Act

or by state governments under similar state laws, as a potentially responsible party for 18 hazardous waste sites. Under the Superfund

Act, all parties who may have contributed any waste to a hazardous waste site, identified by the Agency, are jointly and severally

liable for the cost of cleanup unless the Agency agrees otherwise. It is Corning’s policy to accrue for its estimated liability related to

Superfund sites and other environmental liabilities related to property owned by Corning based on expert analysis and continual

monitoring by both internal and external consultants. At December 31, 2011 and 2010, Corning had accrued approximately $25

million (undiscounted) and $30 million (undiscounted), respectively, for the estimated liability for environmental cleanup and related

litigation. Based upon the information developed to date, management believes that the accrued reserve is a reasonable estimate of the

Company’s liability and that the risk of an additional loss in an amount materially higher than that accrued is remote.

Dow Corning Corporation. Corning and The Dow Chemical Company (Dow Chemical) each own 50% of the common stock of

Dow Corning. In May 1995, Dow Corning filed for bankruptcy protection to address pending and claimed liabilities arising from

many thousands of breast implant product lawsuits. On June 1, 2004, Dow Corning emerged from Chapter 11 with a Plan of

Reorganization (the Plan) which provided for the settlement or other resolution of implant claims. The Plan also includes releases for

Corning and Dow Chemical as shareholders in exchange for contributions to the Plan.

Under the terms of the Plan, Dow Corning has established and is funding a Settlement Trust and a Litigation Facility to provide a

means for tort claimants to settle or litigate their claims. Inclusive of insurance, Dow Corning has paid approximately $1.7 billion to

the Settlement Trust. As of December 31, 2011, Dow Corning had recorded a reserve for breast implant litigation of $1.6 billion. As a

separate matter arising from the bankruptcy proceedings, Dow Corning is defending claims asserted by a number of commercial

creditors who claim additional interest at default rates and enforcement costs, during the period from May 1995 through June 2004.

As of December 31, 2011, Dow Corning has estimated the liability to commercial creditors to be within the range of $86 million to

$280 million. As Dow Corning management believes no single amount within the range appears to be a better estimate than any other

amount within the range, Dow Corning has recorded the minimum liability within the range. Should Dow Corning not prevail in this

matter, Corning’s equity earnings would be reduced by its 50% share of the amount in excess of $86 million, net of applicable tax

benefits. In addition, the London Market Insurers (the LMI Claimants) claimed a reimbursement right with respect to a portion of

insurance proceeds previously paid by the LMI Claimants to Dow Corning. This claim was based on a theory that the LMI Claimants

overestimated Dow Corning’s liability for the resolution of implant claims pursuant to the Plan. Based on settlement negotiations,

Dow Corning had estimated that the most likely outcome would result in payment to the LMI Claimants in a range of $10 million to

$20 million. During the third quarter, Dow Corning and the LMI Claimants settled the claim for an amount within that range. There

are a number of other claims in the bankruptcy proceedings against Dow Corning awaiting resolution by the U.S. District Court, and it

is reasonably possible that Dow Corning may record bankruptcy-related charges in the future. The remaining tort claims against

Corning are expected to be channeled by the Plan into facilities established by the Plan or otherwise defended by the Litigation

Facility.

Hemlock Semiconductor Group, of which Dow Corning owns 63%, brought an action against one of its customers to enforce

multiyear supply agreements requiring the customer to purchase or pay for quantities of polycrystalline silicon used in the solar power

industry. Hemlock Semiconductor Group and the customer resolved the dispute during the fourth quarter. The settlement resulted in

Dow Corning recognizing pre-tax income of approximately $420 million for the year ended December 31, 2011, including previously

deferred revenue. After income taxes and amounts attributable to non-controlling interests, net income attributable to Dow Corning

for the year ended December 31, 2011, increased by approximately $177 million from this settlement.

Pittsburgh Corning Corporation. Corning and PPG Industries, Inc. (PPG) each own 50% of the capital stock of Pittsburgh Corning

Corporation (PCC). Over a period of more than two decades, PCC and several other defendants have been named in numerous

lawsuits involving claims alleging personal injury from exposure to asbestos. On April 16, 2000, PCC filed for Chapter 11

reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania. At the time PCC filed for bankruptcy

protection, there were approximately 11,800 claims pending against Corning in state court lawsuits alleging various theories of

liability based on exposure to PCC’s asbestos products and typically requesting monetary damages in excess of one million dollars per

claim. Corning has defended those claims on the basis of the separate corporate status of PCC and the absence of any facts supporting

claims of direct liability arising from PCC’s asbestos products. Corning is also currently involved in approximately 9,900 other cases

(approximately 38,300 claims) alleging injuries from asbestos and similar amounts of monetary damages per case. Those cases have

been covered by insurance without material impact to Corning to date. As described below, several of Corning’s insurance carriers

have filed a legal proceeding concerning the extent of any insurance coverage for these claims. Asbestos litigation is inherently

difficult, and past trends in resolving these claims may not be indicators of future outcomes.

16

Corning, with other relevant parties, has been involved in ongoing efforts to develop a Plan of Reorganization that would resolve the

concerns and objections of the relevant courts and parties. In 2003, a plan was agreed to by various parties (the 2003 Plan), but, on

December 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that 2003 Plan. On January 29, 2009, an

amended plan of reorganization (the Amended PCC Plan) - which addressed the issues raised by the Court when it denied

confirmation of the 2003 Plan - was filed with the Bankruptcy Court.

The proposed resolution of PCC asbestos claims under the Amended PCC Plan would have required Corning to contribute its equity

interests in PCC and Pittsburgh Corning Europe N.V. (PCE), a Belgian corporation, and to contribute a fixed series of payments,

recorded at present value. Corning would have had the option to use its shares rather than cash to make these payments, but the

liability would have been fixed by dollar value and not the number of shares. The Amended PCC Plan would, originally, have

required Corning to make (1) one payment of $100 million one year from the date the Amended PCC Plan becomes effective and

certain conditions are met and (2) five additional payments of $50 million, on each of the five subsequent anniversaries of the first

payment, the final payment of which is subject to reduction based on the application of credits under certain circumstances.

Documents were filed with the Bankruptcy Court further modifying the Amended PCC Plan by reducing Corning’s initial payment by

$30 million and reducing its second and fourth payments by $15 million each. In return, Corning would relinquish its claim for

reimbursement of its payments and contributions under the Amended PCC Plan from the insurance carriers involved in the bankruptcy

proceeding with certain exceptions.

On June 16, 2011, the Court entered an Order denying confirmation of the Amended PCC Plan. The Court’s memorandum opinion

accompanying the order rejected some objections to the Amended PCC Plan and made suggestions regarding modifications to the

Amended PCC Plan that would allow the Plan to be confirmed. Corning and other parties have filed a motion for reconsideration,

objecting to certain points of this Order. Certain parties to the proceeding filed specific plan modifications in response to the Court’s

opinion and Corning supported these filings. Corning and other parties also filed a motion for reconsideration objecting to certain

points in the Court’s opinion and Order. Proposed plan modifications will be discussed during the hearing scheduled for February 17,

2012.

The Amended PCC Plan does not include certain non-PCC asbestos claims that may be or have been raised against Corning. Corning

has recorded an additional $150 million for such claims in its estimated asbestos litigation liability. The liability for non-PCC claims

was estimated based upon industry data for asbestos claims since Corning does not have recent claim history due to the injunction

issued by the Bankruptcy Court. The estimated liability represents the undiscounted projection of claims and related legal fees over

the next 20 years. The amount may need to be adjusted in future periods as more data becomes available.

The Amended PCC Plan with the modifications addressing issues raised by the Court’s June 16 opinion remains subject to a number

of contingencies. Payment of the amounts required to fund the Amended PCC Plan from insurance and other sources are subject to a

number of conditions that may not be achieved. The approval of the (further modified) Amended PCC Plan by the Bankruptcy Court

is not certain and faces objections by some parties. If the modified Amended PCC Plan is approved by the Bankruptcy Court, that

approval will be subject to appeal. For these and other reasons, Corning’s liability for these asbestos matters may be subject to

changes in subsequent quarters. The estimate of the cost of resolving the non-PCC asbestos claims may also be subject to change as

developments occur. Management continues to believe that the likelihood of the uncertainties surrounding these proceedings causing

a material adverse impact to Corning’s financial statements is remote.

Several of Corning’s insurers have commenced litigation in state courts for a declaration of the rights and obligations of the parties

under insurance policies, including rights that may be affected by the potential resolutions described above. Corning is vigorously

contesting these cases. Management is unable to predict the outcome of this insurance litigation and therefore cannot estimate the

range of any possible loss.

17

[Mr. Sunshine] Read that GLW is a defendant in an asbestos related class action lawsuit and tha...

Mr. Sunshine — 3/22/2012 5:39:26 PM

Read that GLW is a defendant in an asbestos related class action lawsuit and that they have a lot of unfunded pension liabilities. Does anyone know if this is true, and how much these potential hits would be? Perhaps that is holding the price down.

[John Hayman] Well, that's good that they are buying, but.....the stock could be in the single...

John Hayman — 3/12/2012 9:01:03 AM

Well, that's good that they are buying, but.....the stock could be in the single digits. I hope it turns here, but not expecting it too.

Good company, but needs something for it's stock price!!

John
go glw, long the stock

[Mad2] Insider buying has stepped up since 4th qtr last year which happened to correspo...

Mad2 — 3/11/2012 11:11:47 AM

Insider buying has stepped up since 4th qtr last year which happened to correspond to GLW's bottom.

secform4.com

mad2

[Asymmetric] Corning Looks to Break the Gorilla Glass Ceiling By SUZANNE MCGEE, The Fiscal...

Asymmetric — 1/15/2012 2:54:05 AM

Corning Looks to Break the Gorilla Glass Ceiling

By SUZANNE MCGEE, The Fiscal Times January 12, 2012

thefiscaltimes.com

Can a gorilla get the monkey off of Corning’s (GLW) stock?

That’s certainly what the venerable manufacturer of glassware and related products is hoping, just as a decade ago it counted on fiber-optics to revive its fortunes. The “gorilla” in question is actually the second generation of Corning’s Gorilla Glass, introduced as a tough and scratch-resistant glass that makers of smartphones, tablets and other consumer electronic gadgets can use to make their own products more appealing to consumers.

Around Thanksgiving, Corning cut its forecast for its fourth-quarter earnings, partly because of a slump in demand and prices for liquid-crystal display glass and because a South Korean customer walked away from a contract to purchase products from Corning. But at the same time, the company slashed its forecast for sales of the original Gorilla Glass, predicting sales would fall 25 percent over previous year’s levels, compared to its previous outlook for a 15 percent decline.

Will a new version of Gorilla Glass be enough to revive the company’s earnings, not to mention its stock price? Since Corning only unveiledthe product to potential customers at this week’s Consumer Electronics Show in Las Vegas, it’s too soon to tell. It is thinner and lighter, Corning claims, without losing any of its strength.

That means that customers could produce thinner devices themselves – the kind of ultra-light weight smartphones, tablets, e-readers and other gizmos consumers covet most – without sacrificing anything in terms of sensitivity to touch or image clarity. Acer, Asus and Microsoft (MSFT) will be using Gorilla Glass 2 in some new devices, but Corning needs other device makers to jump on board as well.

At the end of the day, however, it all boils down to the consumers themselves. Are they ready to replace year-old devices with thinner, lighter-weight versions offering higher-quality images – or will they opt to just make do and save money?

One of the reasons for the slow and steady slide in Corning’s stock price last year was that consumers were reluctant to shop – except when offered big discounts. While consumers are still hyper-sensitive to bad macro news (stubbornly high unemployment rates, the prospect of Europe’s crisis leading to another recession), same-store sales did do better than many pundits had expected in December, and luxury retailers did better than most. So consumers, while still value-conscious, do seem to be willing to open their wallets and spend to acquire new gadgets as long as it’s clear to them that these gadgets are also of higher quality.

Absent an economic crisis or other macro-level setback, it seems clear that Corning’s share price could respond quickly to any good Gorilla Glass news. The stock, up 6 percent since Friday’s close, has outperformed the Dow Jones Industrial Average and the S&P 500 since the product was launched this week while still hovering not far off its 52-week low of $11.51. (It closed at $14.32 yesterday, up 2.4 percent.)

The company is scheduled to report its fourth-quarter earnings January 24, and now that its bearish revision of sales guidance has been processed, all analysts but one are recommending the stock as a hold to an overweight or buy. (The median forecast is for the stock to rise to $18 a share; the highest price target is a whopping $24.)

Corning recently boosted its dividend payout – a sign that it’s quietly confident about its future prospects. If the company’s stock price slumps in response to earnings, that may be an opportunity to bet that the gorilla – or rather, Gorilla Glass 2 – may provide the impetus that’s required to revive the company’s fortunes.

[JakeStraw] Corning To Unveil Gorilla Glass 2 forbes.com

JakeStraw — 1/9/2012 8:40:55 AM

[Asymmetric] How Corning marketed a product no one really sees SIMON HOUPT - The Globe and ...

Asymmetric — 12/16/2011 1:19:56 AM

How Corning marketed a product no one really sees
SIMON HOUPT - The Globe and Mail

This is a story about how a gorilla taught some engineers to speak like human beings.

In the summer of 2010, senior management at the industrial glass company Corning Inc. realized they had an opportunity to create something entirely new. That in itself wasn’t unusual: For more than 160 years, the company’s laboratories has pushed the envelope of material science, creating high-tech if unglamorous products like fibre optic cable. This new development, though, would take place outside the company’s tightly controlled labs, in the unpredictable world of consumer marketing.

For about a year, Corning had been selling something called cover glass to consumer electronics manufacturers. As streaming video became more widespread, smart phones and tablet computers have begun using cover glass to provide better clarity and more resistance to shocks and other damage. In 2009, Corning had sold about $43-million of its cover glass. By the middle of 2010, sales were projected to hit about $250-million.

They called the product Gorilla Glass, and they thought that if they marketed it correctly, it could become a valuable consumer brand. “We wanted you as a consumer to go in to an electronics store and say, ‘I want to see the cellphones that have Gorilla Glass.’ That was the strategy,” says Daniel Collins, Corning’s vice-president of communications. “So we went beyond our customer, to our customer’s customer. We also wanted to make cover glass in essence – and therefore Gorilla Glass – the industry standard.”

The only problem was that Corning hadn’t marketed to consumers in more than a decade. It didn’t know how to talk to them. It didn’t even have a formal marketing department. Its New York-based ad agency, Doremus, specializes in business-to-business communications.

Oh sure, for decades, Corning’s sturdy cookware had been a much beloved consumer brand. But in 1997, with the company shifting its focus to the business market, it sold off the line to World Kitchen Inc. and closed its consumer marketing department. Marketing products like optical fibre to wireless and cable companies is a wholly different animal. In that context, says Mr. Collins, “A product is really a component. We make optical fibre, but it is encased in cable and buried in the ground.”

Doremus developed a campaign that would focus on the attributes Corning felt would most appeal to consumers, boiled down to the tagline: “Tough yet beautiful.”

The campaign is an example of something called “ingredient branding,” the practice of creating a consumer-friendly image for an internal component that normally would go unseen or unnoticed by people buying a finished product. Ingredient branding isn’t new – it stretches back decades, and includes campaigns about pink fibreglass and Teflon on cookware – but it is becoming more commonplace.

In the 2010 book Ingredient Branding: Making the Invisible Visible, Philip Kotler, a professor of marketing at the Kellogg School of Management, notes there are a number of conditions that must be met if branding a component is going to be successful: It has to be highly differentiated (he cited Gore-Tex as an example); it must be central to the functioning of the product; the company selling the finished product has to invest in marketing the component; branding the component helps the final product stand out from similar products; and the final product is complex and assembled from many components supplied by multiple firms.

Corning had a nifty precedent to follow – another high-tech company that learned the trick of speaking to consumers.

In the mid-1980s, after the computer-chip maker Intel had its application for a trademark on its “386” chip turned down, executives recognized they had to figure out a way of differentiating their product to protect it from becoming commoditized. So, in 1991, they launched the “Intel Inside” co-operative marketing campaign, supporting their customers’ ad buys while at the same time securing a sliver of space in those ads directed at consumers. It was a hugely risky move: As Prof. Kotler’s book points out, Intel’s annual sales were only about $500-million (U.S.), but they threw $110-million into their consumer campaign over the course of three years.

By all measures, it was a success, boosting awareness of Intel among consumers from about 24 per cent to about 95 per cent only a few years later. The strategy was studied and copied around the world, but the case held a cautionary tale: Some experts believe the desktop maker IBM failed to reap much economic benefit from having Intel chips in their personal computers. And the branding success gave Intel greater leverage in negotiations.

Which may be why some marketers prevent Corning from acknowledging that Gorilla Glass is used in their products. Still, Corning is selling the product to more than 20 different brands, which used it in more than 400 products, including Sony’s high-end Bravia television, Samsung’s Galaxy tablet, Motorola’s new Razr phone, and Lenovo ThinkPads.

All are now noting – either buried in their spec sheets or boasting in voiceovers – that they use Gorilla Glass.

Corning launched its consumer campaign in late 2010 with a trio of ads featuring a gorilla using high-tech products as part of his day: a cellphone, or a TV built into a fridge door. The ads weren’t tested, Mr. Collins says. For that matter, neither was the name itself. “No, it was just something that stuck, and when we began to look at it we started to think, ‘What are the attributes of the product itself? And those are in the advertising: In many ways a gorilla evokes strength, toughness, but it also has a personal appeal – a human side to it if you will – which we thought played with the beauty, the elegance.”

Corning added a pair of slow-motion spots to its YouTube channel in the spring of 2011, demonstrating the strength of the glass: In one, a baseball shot at a narrow sheet of glass bounces off it like rubber off cement. In another, it’s a bowling ball.

The company has spent an estimated $15-million on media buying for its campaign in the past 13 months – a tiny amount for a brand hoping to lodge itself in consumers’ consciousness. But they say internal research shows people are starting to ask for Gorilla Glass.

In early October, Corning made a $25,000 contribution to the Dian Fossey Gorilla Fund International, in support of the organization’s efforts to protect the animals and their habitat in Africa.

Sales of Gorilla Glass for 2011 are projected to be almost three times last year’s levels, landing somewhere between $700-million and $750-million.

[JakeStraw] Corning Cable Systems Awarded Passive Solutions for Multi-dwelling Units in the ...

JakeStraw — 11/15/2011 3:25:58 PM

Corning Cable Systems Awarded Passive Solutions for Multi-dwelling Units in the Australian NBN Fiber to the Home Deployment
corning.com

[JakeStraw] Deleted -

JakeStraw — 11/14/2011 9:40:54 AM

[Asymmetric] A Glass Act on the Cheap By SANDRA WARD / Barrons ...

Asymmetric — 11/13/2011 12:21:33 AM

A Glass Act on the Cheap

By SANDRA WARD / Barrons Nov 12, 2011

Corning's wares have become the face of consumer electronics, from TVs to tablets. But its shares have practically dropped from sight. Why they could do smashingly well.

Shattered by falling sales of televisions and personal computers, shares of specialty-glass maker Corning have dropped 20% since the start of the year, and now trade at levels last seen during the height of the worldwide financial crisis in late 2008 and 2009.

Then as now, the makers of flat panels, to which Corning supplies glass, drastically cut back on inventories and reduced production levels at their plants in response to an uncertain economic environment that has hindered consumer spending and hurt pricing. The flat-panel makers are taking their cue from the television makers.

Corning shares (ticker: GLW) performed well through the early part of this year, much as a bullish piece in Barron's last December predicted ("Corning's Winning App for the iPad," Dec. 13, 2010). But euro-zone financial woes, fears of a double-dip recession and the protracted budgetary stalemate in Washington this past summer have undermined business and sent the stock tumbling from a first-quarter high. A revival could now be in order.

About 85% of Corning's profits are tied to the display glass typically found in TVs and personal computers, as well as smartphones and tablet computers, even though the segment accounts for only 45% of revenue.

The company's other businesses include fiberoptics for telecommunications; emission controls for light-duty, gasoline-powered vehicles and diesel-powered cars and trucks; specialty glass–known as Gorilla glass—that's thin and durable and used for smartphones and tablets, and glassware, such as Pyrex, used both in scientific laboratories and in cookware.

At a recent$15 a share, Corning, the world's leading maker of specialty glass, carries a stunningly low price/earnings multiple of 7.9 times 2012 estimated earnings of $1.89 a share. The share price is only slightly higher than the company's book value of $13.79 a share.

That's quite a comedown for a company that posted $2.1 billion in sales in the third quarter, a 30% increase from the year-earlier period, with all segments posting double-digit percentage growth. Gross margin expanded to about 47% from 44.3%, and Corning beat earnings expectations for the period by posting net income of $811 million, or 48 cents a share, excluding special items. Analysts had been expecting earnings of 42 cents a share, down from year-ago profits of $785 million, or 51 cents a share.

Gorilla on the Loose

Corning's thin, light and durable Gorilla glass is playing a key role in the smartphone revolution. So why is its stock at the lowest level since the financial crisis?

Recent Price $15.00
52-Week Hi-Lo
$23.43-$11.51
Mkt Value (bil) $24
EPS 2012E $1.89
PE 2012E 7.9
EPS Growth '11 vs '12 2.7%
E=Estimate
Source: Thomson Reuters

At the time results were released, Corning Chairman and Chief Executive Wendell Weeks asserted the company is "well-positioned" to reach its goal of $10 billion in sales "within the next several years." Also, Chief Financial Officer Jim Flaws predicted retail demand would rise next year, "potentially in the double-digit range again." With inventories at historic lows, higher demand from consumers would set the stage for stronger order demand for glass.

Signalling its optimism about Corning's prospects, the company's board of directors recently approved hiking the annual dividend by 50%, to 30 cents a year, from 20 cents, which brings the dividend yield to more than 2%. It also authorized a stock buyback plan of up to $1.5 billion in shares through 2013, with purchases beginning in the current quarter.

Corning can well afford to give a little extra to shareholders: The company has $4 billion in net cash on its balance sheet, and expects to be generating $7 billion in free cash flow by 2014, up from $2.8 billion last year.

"We believe our future free-cash-flow prospects are excellent, driven by business performance and lower capital spending starting in 2012, as some major projects are finished," CEO Weeks said in announcing the action to enhance shareholder returns. "In our opinion, the company's current stock price represents a significant discount to the real value of Corning's businesses."

THE BOARD'S MOVES HAVE SUPPORTED shares of Corning, whose market value is $24 billion. The stock is up 15% since Oct. 5, when the board actions were announced.

Board member John A. Canning Jr., a managing director and co-founder of Chicago-based private-equity firm Madison Dearborn Partners, gave his endorsement to the stock when he bought 30,000 shares in late October for a total of $462,000, or an average price of $15.40 a piece. In August, CFO Flaws ponied up more than $1 million to buy 65,000 shares at an average of $13.49 each, and another 10,000 at about $13.77 a share.

Shattering Expectations

Corning posted $2.1 billion in sales in the third quarter, a 30% increase from a year earlier; all segments had double-digit percentage growth.

"It's very attractive," analyst Darice Liu of Brigantine Advisors says of Corning's stock, noting that long-term fundamentals are strong and the valuation is compelling. She sees the shares possibly hitting 18 in the next year, a gain of nearly 20% from current levels.

"The supply chain is so tight, that when panel makers pull the trigger and increase utilization and productivity, you'll see an immediate positive impact," says Liu.

Corning was the only stock added in the third quarter to the $5 billion Oakmark Fund, which is dedicated to investing in large-cap companies that are trading at discounts to their intrinsic value; the fund is managed by longtime value investor William Nygren. He bought Corning stock at $13 a share, below book value and at less than seven times earnings.

Nygren points out that in 2000, at the height of the technology, telecommunications and media boom, Corning earned $1.23 a share on the strength of its fiberoptics business, and its stock traded at 113.

That was one extreme, but now the shares have swung too far in the other direction. Last year, driven by a boom for LDC TVs in Japan and China, Corning earned more than $2 a share. It is expected to earn $1.84 a share this year.

NEAR-TERM PRICING PRESSURES in the glass-panel market are weighing on the shares. Corning expects to lower prices this quarter to a greater extent than it has in previous quarters, as a response to excess capacity and to maintain market share. By the end of the fourth quarter, however, the company expects inventory levels in its end-markets to fall below 14 weeks' worth of supply, down from the 17 weeks early in the third-quarter.

The Bottom Line

With inventory levels low now, TV makers will quickly need lots of glass when consumer demand picks up. That could lift Corning's stock by 20% or more.

The television market is the most critical segment for Corning, because of the high square-footage of glass required and the numbers of televisions sold.

With the approach of the holiday season, which now extends well into the first quarter to include Chinese New Year, in addition to the Christmas and Hanukkah celebrations in the fourth quarter, prices for liquid-crystal display (LCD) panels are showing signs of stabilizing after declining steadily since July. That's according to Display Search, a global market-research and consulting firm that's part of NPD Group, a retail-trend tracker. Prices in November were flat with October's.

"The indications are that there will be pretty aggressive pricing for the holidays, and that could drive volume and be a positive for industry growth," said Paul Semenza, senior vice president at Display Search. "The risk is [inventories] are too lean. If demand spikes, inventories wouldn't be adequate." That's a risk Corning investors might happily take.

[Asymmetric] Corning Director's $462,000 Buy By GRACE L. WILLIAMS / Barrons / ...

Asymmetric — 11/2/2011 11:09:58 PM

Corning Director's $462,000 Buy
By GRACE L. WILLIAMS / Barrons / Nov 2, 2011

John J. Canning bought 30,000 shares of the glass giant. A recent multiyear low and uncertainties about the coming year for the glass industry hasn't stopped insiders at Corning from seeing the rose-colored side of the company and proving their confidence by buying up shares.

On Oct. 27 and 28, director John J. Canning, Jr. bought 30,000 shares of Corning (ticker: GLW) for $462,000, an average of $15.40 each. This is his first transaction at Corning in 2011. Canning bought 20,000 shares of the glass giant for $383,200, an average of $19.16 each, on Aug. 5, 2010.

Following his recent transaction, Canning directly owns 67,873 shares of Corning, a stake of less than 1%.

Canning has been a director at Corning since 2010 and is co-founder and chairman of Chicago-based investment firm Madison Dearborn Partners, LLC.

Sean MacNeal, an analyst for InsiderScore.com, says, "This is an interesting buy in that given Canning's background at Madison Dearborn, his pedigree makes you want to take more notice. I like the fact that it followed up the Chief Financial Officer's purchase in August which was also actionable."

On Aug. 10, CFO James B. Flaws bought 65,000 Corning shares for $876,600, an average of $13.49 each, and followed up the next day by buying 10,000 additional shares for $137,700, an average of $13.77 each. The buys lifted his direct holdings to 270,382 shares.

"When Corning announced its buyback [during the summer], the CEO called the shares undervalued. He's saying it, other insiders are stepping up to back him and someone with Canning's background is good. It's a nice little purchase for Canning," says MacNeal.

Shares skidded to a multiyear low of $11.51 each on Oct. 4, a number it last saw in March 2009. Corning has rebounded since then, closing at $13.96 on Wednesday.

On Oct. 26, Corning's third-quarter earnings topped expectations but that didn't necessarily impress the Street.

Jefferies analyst George C. Notter maintained Corning at Hold with a price target of $15.75. Earnings topped Jefferies' expectations, but the outlook for the display business in the fourth-quarter was "so-so," Notter wrote in a research report. "Incrementally, we have some creeping concerns about the competitive environment in the glass business longer term. Without an obvious fundamental catalyst, we think the shares will remain range-bound over the intermediate- and longer-term," wrote Notter.

[Mr. Sunshine] Great video. I have been looking at GLW for years but am just now buying some. ...

Mr. Sunshine — 8/1/2011 7:15:07 PM

Great video. I have been looking at GLW for years but am just now buying some. At these prices, and with the potential, seems like a no brainer.