Corning Inc. (GLW) Falls on Revenue Disappointment
Shares of Corning, NY, based Corning Inc. (GLW) fell on Tuesday, against the backdrop of a mostly flat day in stocks overall. Corning's stock closed down 8.35%, losing $1.75 per share, to close at $19.22, on volume of 39,904,850 shares, representing about four times the average trading volume for the stock. The company announced that while it's earnings were in line with analyst’s expectations, is revenues were below expectation, and below results for both the previous quarter and the same quarter a year earlier.
Corning announced its financial results for the first quarter ended March 31, 2016. GAAP basis earnings came in at a loss of -$392 million, or -$0.36 per share. This compares to a net income of $200 million, or $0.17 per share for the third quarter, and a net income of $407 million, or $0.29 per share, for the first quarter of 2015. However the news that caused the selloff was that revenue for the quarter came in at $2.05 billion, which was below analysts estimates, and less than the $2.27 billion reported for the first quarter of 2015.
There were also disappointing results in revenues in several of the company's business segments. Core sales in its Display Technologies segment came in at $829 million, well below the $972 million for the first quarter of 2015. The Optical Communications segment reported sales of $609 million for the quarter, down from $697 million a year earlier. Also falling were the Environmental Technologies and Specialty Materials segments. However, the company reported higher first quarter sales in the Life Sciences segment, as well as higher core equity earnings from Dow Corning Corporation.
“We are pleased that we were able to meet overall profit expectations in the first quarter despite the impact from a manufacturing software implementation issue,” Wendell P. Weeks, chairman, chief executive officer, and president. “We expect strong sequential core sales and profit growth in the second quarter. We are also making great progress on our four-year plan to grow, return cash to our shareholders, and create significant value.”
In the first quarter, the company announced a 12.5% increase in the quarterly dividend, consistent with its plan to increase the dividend per share by at least 10% annually. The company also repurchased $751 million of outstanding shares.
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