GLW's Q1 Earnings Beat on Strong Growth in Optical Communications

Corning Incorporated GLW reported impressive first-quarter 2025 results, wherein adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across multiple end markets. The growing adoption of its advanced products for Gen-AI (generative artificial intelligence) applications is a tailwind. Its U.S.-made solar products are also gaining solid market traction.

Net Income of GLW

On a GAAP basis, the company reported a net income of $157 million or 18 cents per share compared with $209 million or 24 cents in the year-ago quarter. Despite top-line growth, higher operating expenses affected the net income.

Core earnings for the reported quarter were $467 million or 54 cents per share, up from $330 million or 38 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 4 cents. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

GLW’s Revenues

Net sales, on a GAAP basis, were $3.45 billion, up from $2.97 billion reported in the year-ago quarter. Solid traction in several verticals boosted net sales. Core sales were up 13% to $3.67 billion. The top line beat the consensus estimate of $3.54 billion.

GLW’s Segment Results

Optical Communications generated $1.35 billion in revenues, up 46% year over year. Solid demand for Corning’s Gen-AI solutions propelled net sales in the Enterprise vertical of this segment. The top line beat our estimate of $1.2 billion. Net income from this segment improved to $201 million from $100 million reported in the year-ago quarter.

Display Technologies registered $905 million in revenues, up 4% year over year, led by greater volume and a price hike. Net sales missed our revenue estimate of $942.2 million. The segment’s net income was $243 million compared with the prior-year quarter’s figure of $201 million.

Net sales from Specialty Materials were $501 million, up 10% year over year, as demand for premium glass for mobile devices remained strong. The top line exceeded our estimate of $492.2 million. Net income for the segment was $74 million, up from $44 million a year ago.

The Automotive business contributed $440 million in net sales, down from $491 million in the year-ago quarter. The downturn was primarily attributable to weakness in light and heavy-duty markets, particularly in Europe and North America. The segment is created by separating the Automotive Glass Solutions business from Hemlock and Emerging Growth Business and converging it with the Environmental Technologies segment. Net income was $68 million down 13% year over year.

Revenues from the Life Sciences segment were $234 million compared with the year-earlier quarter’s figure of $236 million. Segment net income was $13 million, matching the prior-year quarter’s figure.

Hemlock and Emerging Growth Businesses reported an 11% decline in net sales year over year to $244 million. The segment reported a net loss of $16 million against a net income of $17 million in the year-ago quarter.

Other Details of GLW Q1 Results

Quarterly gross profit increased to $1.2 billion from $993 million, with respective margins of 35.2% and 33.4%. Operating income was $445 million, up from $254 million in the prior-year quarter. Core gross margin was 37.9%, up from 36.8% in the year-ago quarter, owing to various productivity and pricing improvement actions across business operations.

GLW’s Cash Flow & Liquidity

During the March quarter, Corning generated $151 million of net cash from operations compared with a cash flow of $96 million in the year-earlier quarter. As of March 31, 2025, the company had $1.35 billion in cash and cash equivalents with $6.95 billion of long-term debt.

GLW’s Outlook

For the second quarter of 2025, core sales are estimated at $3.85 billion. Core EPS is expected to be in the range of 55-59 cents.

GLW’s Zacks Rank & Stocks to Consider

Corning currently carries a Zacks Rank #3 (Hold).

InterDigital IDCC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.

Ubiquiti Inc. UI carries a Zacks Rank #2 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. In the trailing four quarters, Ubiquiti delivered an earnings surprise of 7.48%.

Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

Ericsson ERIC carries a Zacks Rank #2 at present. Ericsson is well positioned to cash in on the market momentum with its competitive 5G product portfolio. The company continues to execute its strategy to become a leading mobile infrastructure provider and establish a focused enterprise business. In the last reported quarter, Ericsson delivered an earnings surprise of 33.33%.

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