CORNING, N.Y. - Corning Incorporated (NYSE: NYSE:GLW) today disclosed its financial outcomes for the second quarter of 2024, surpassing analyst expectations for earnings per share (EPS) but experiencing a notable decline in pre-market trading. The company reported an adjusted EPS of $0.47, a cent higher than the consensus estimate of $0.46. Revenue for the quarter was also higher, reaching $3.6 billion against the anticipated $3.55 billion.
Despite the earnings beat, Corning's stock fell 5.3% in pre-open trade, indicating investor concerns that may extend beyond the reported figures. The company's GAAP sales stood at $3.25 billion, with core sales reaching $3.60 billion, reflecting a robust year-over-year (YoY) growth of 4%. The GAAP EPS was $0.12, influenced by various adjustments including currency translations and restructuring charges.
Wendell P. Weeks, Corning's chairman and chief executive officer, highlighted the quarter's success, attributing it to the strong adoption of new optical connectivity products designed for generative AI. This innovation drove record sales in the Enterprise segment of their Optical Communications business. Weeks expressed confidence in the company's 'Springboard' plan, which aims to add over $3 billion in annualized sales with significant profit and cash flow in the next three years.
For the third quarter, management expects core sales to grow to approximately $3.7 billion, with adjusted EPS projected to be in the range of $0.50 to $0.54. This guidance suggests a sequential sales increase primarily due to the continued adoption of Corning's new optical connectivity products.
Corning's second-quarter performance also saw improvements in core gross margin, which increased both sequentially and YoY by 110 and 170 basis points, respectively, to 37.9%. The adjusted free cash flow was reported at $353 million.
The company's segments showed varied performance, with Optical Communications marking a 20% sequential increase in sales, largely due to AI-related connectivity solutions. Display Technologies and Specialty Materials also reported YoY sales growth of 9% and 18%, respectively. However, Environmental Technologies faced a 6% decline in sales YoY, attributed to the North American Class 8 truck market slowdown.
Corning's strategic agreement with Lumen Technologies, reserving 10% of Corning's global fiber capacity for the next two years, is set to interconnect AI-enabled data centers, further solidifying the company's growth trajectory.
Investors will be closely monitoring Corning's progress as it navigates market dynamics and continues to execute its growth strategy.
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