Corning forecasts second-quarter core sales above estimates on steady carrier spending

By Thomson Reuters Apr 30, 2024 | 8:11 AM

(Reuters) – Specialty glass maker Corning forecast second-quarter core sales above Wall Street expectations on Tuesday, banking on price increases and healthy demand for its fiber optic cables amid recovery in spending from telecom clients.

Shares of the New York-based company rose more than 3% in premarket trading.

After a period of sluggish spending by wireless carriers on its fiber optic cables, Corning is seeing a recovery as telecom clients upgrade their infrastructure along with more uses for the company’s products in data centers, which power artificial intelligence applications.

The company had said in January it expects carrier customers to deplete their excess inventory and resume normal purchasing patterns.

“We’re seeing encouraging signs of improving market conditions,” said Corning CEO Wendell Weeks.

Tech firms have been ramping up spending on products such as fiber optic cables, connectors, optical components and infrastructure which can handle large AI workloads, benefiting companies like Corning.

“We are executing our plans to add more than $3 billion in annualized sales within the next three years,” Weeks said.

Corning expects second-quarter core sales of about $3.4 billion, compared with analysts’ average estimate of $3.33 billion, according to LSEG data.

The company, which makes Gorilla Glass used in smartphones by companies such as Samsung and Apple, reported first-quarter total core sales of $3.26 billion, beating estimates of $3.12 billion.

Revenue for the company’s optical communications segment, its largest by sales, was at $930 million, versus estimates of $866.7 million.

On an adjusted basis, it earned 38 cents per share, compared with estimates of 35 cents per share.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shailesh Kuber and Shilpi Majumdar)