Though Corning's business continues to be down compared to last year, the company has seen sequential growth in sales, earnings and free cash flow. Corning recently introduced their new Gorilla Glass Victus, which can survive higher drops and is twice as scratch-resistant as their previous version. Gorilla Glass is the most common glass used in smartphones. With the growth of 5G connectivity and wireless charging, the use of glass on smartphones is expected to become more widespread as glass casings do not interfere with 5G or wireless charging signals like metal casings do. As 5G connectivity becomes the standard, demand for Corning's optical fiber could see a boost. For 5G technology to work and be consistent, a tighter mesh of radio antennas is needed compared to 3G or 4G connectivity which requires more fiber to be deployed. Higher demand for optical fiber could provide a boost to Corning's biggest revenue generating segment. Management expects that the sequential improvement they have seen amid the pandemic will keep them on track to be cash flow positive for the full year.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fall 2020 market commentary.
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