The once mighty Corning stock has taken a hit recently but the optical networking company, a key cog in the artificial-intelligence trade, said Tuesday it expects "outstanding" business performance to continue.
Corning stock rose 3.2% to $131.76 in premarket trading on Tuesday after ending Monday up 3.3% at $127.74. The stock and shares of other optical networking companies have become a major part of the AI trade.
Other stocks in the sector followed Corning higher in the premarket session. Ciena advanced 2.5%, Coherent gained 3%, and Lumentum rose 2.9%.
Corning stock has been hit by the turn in investor sentiment around the the AI-trade which was spurred on by concerns about the massive amount of spending -- and potential for debt -- needed for the AI buildout.
Suffice it to say it was a perfect time for the company to report better-than-expected earnings and offer solid quarterly guidance.
Corning on Tuesday posted core earnings of 91 cents a share in the third quarter, up from 67 cents a year ago and above Wall Street expectations of 88 cents. Core sales grew 19% to $5.1 billion, beating the analyst consensus call for $5.03 billion.
The optical communications segment, which has become Corning's largest business, generated net sales of $2.4 billion, up 44% from a year ago. That also beat Wall Street's $2.21 billion expectation.
Corning added that "enterprise networks" sales grew 84% with generative AI product sales growing more than 100%.
The company, looking ahead, expects core sales of $5.2 billion to $5.3 billion in the current quarter with core earnings between 96 cents and $1 a share. Wall Street forecasts fourth-quarter earnings of 93 cents a share on sales of $5.2 billion.
Corning, like many other companies, is deeply tied to the AI infrastructure buildout and Big Tech's capital spending plans. That also means that any concerns about the the buildout and potential risks to investment aren't a great sign for the company.
Shares hit a record closing high of $255.69 on June 29, but over the intervening months the share price has dropped 50% since then.
While investor sentiment has changed, the company remains upbeat.
"We expect our outstanding performance to continue," Chief Financial Officer Ed Schlesinger said in the earnings release Tuesday.
Comments