Are Investors Overreacting to Corning’s Business Update?

By Chris Lange Updated Jan 30, 3:44PM EST · Published Sep 17, 10:40AM EDT

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Are Investors Overreacting to Corning’s Business Update? — © Deagreez / Getty Images

Corning Inc. (NYSE: GLW | GLW Price Prediction) shares dipped on Tuesday after the firm provided an early update on its third-quarter performance. Unfortunately, the firm is reducing expectations for two of its business segments: Display Technologies and Optical Communications.

Within Corning’s Display Technologies segment, several panel manufacturing customers have reduced utilization below anticipated levels in the current quarter. As a result, Corning is reducing its volume forecast for that segment to a sequential decline of a high-single-digit percentage for the quarter.

The company continues to expect third-quarter prices to be flat with the second quarter and full-year glass prices to decline at a low-to-mid-single-digit percentage.

As for Corning’s Optical Communications segment, several major carriers are further reducing capital spending on cable deployments and fiber-to-the-home projects. Additionally, some enterprise customers have reduced their spending below anticipated levels.

Corning now expects third-quarter Optical Communications sales to decline year over year by a low-teen percentage, versus a prior expectation of a low-single-digit percentage decline.

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For full-year 2019, Corning now forecasts Optical Communications sales will decline by 3% to 5%, compared with its prior expectation of a low-to-mid-single-digit percentage increase. Corning expects both carrier and enterprise network sales to decline year over year in the second half of 2019.

Analysts are calling for $0.45 in earnings per share (EPS) and $3.05 billion for the third quarter. In the same period of last year, Corning posted $0.51 in EPS and $3.04 billion in revenue.

Shares of Corning traded down about 8% to $27.62 Tuesday morning, in a 52-week range of $26.78 to $36.56. The consensus price target is $35.06.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.