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Corning Looks Set to Deliver More Upside

August 21, 2014 | About:
rusticnomad

rusticnomad

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Corning (GLW) is having some fantastic luck in 2014. The stock has acknowledged more than 20% so far. Besides, the organization is also focused on conveying worth to its shareholders and consequently, it finished a share repurchase project of $2 billion in the previous quarter. There is something else entirely to this story, which we shall see in point of interest.

Strong performance

Beginning with the results, net sales for the quarter went up 32% to $2.4 billion from the year-prior period of $1.81 billion. This was marginally over analysts' estimate of $2.3 billion. Its net income tumbled to $301 million as contrasted with last year's $494 million. On the other hand, its adjusted earnings beat Wall Street expectations.

Despite the fact that the profit numbers for the first quarter were disappointing, administration is positive about its prospects. As indicated by James Flaws, Corning's CFO, "We expect enhanced results as the year progressed."

The route ahead

Corning is focusing on its development strategies. Administration had effectively discussed in the previous quarter that it plans to rapidly coordinate Corning Precision Materials (CPM) in Korea with a specific end goal to acknowledge synergies, increase further cost advantages and increase its adaptability of glass supply. In the first quarter, the organization finished acquiring CPM. Driven by this acquisition, Corning's display sales enhanced 55% to $1 billion.

In optical communications as well, the organization performed well with enhanced sales numbers. Gorilla glass volumes also enhanced year over year; however its prices declined considerably in the first quarter. This was one of the principle reasons for its profits to decline in the quarter. Yet administration expects the prices to go up in the second quarter.

Corning had avoided the operating results of Hemlock Semiconductor in 2013 to evacuate potential effect of severe unconventionality and instability in the polysilicon market. Yet now the polysilicon business sector is stabilizing, and administration is positive about its prospects. Moreover, Hemlock's earnings were solid in the first quarter. The company's customers are penning more contractual obligations. This is driving sales and profits in both the final quarter of last year and the previous quarter.

Corning has posted some solid numbers. It finished its first quarter with $5.6 billion in cash and short-term investments. Going ahead, the organization expects LCD TV units to develop in the low to mid-single digits, yet regional development will probably be higher. It is normal that the pattern of consumers purchasing bigger televisions will continue.

Notwithstanding this, Corning expects ultra high definition televisions to be a top of the line classification in 2014. Administration believes that ultra high definition would be a real driver of interest within a brief period of time. Additionally, the decline in the prices of LCD in the second quarter won't be as great as it was in the first quarter.

Conclusion

Corning has a decent trailing P/E, yet its forward P/E looks more impressive at 12.75. The stock is presently exchanging close to its 52-week high. But even then, there could be more upside in the future. Despite the fact that its profits have dunked in the present quarter, yet going ahead, the organization expects its prospects to be positive. Taking a gander at the numbers and its future viewpoint, Corning seems to be a reasonable investment alternative.


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