Corning Incorporated: 5G Stock’s Outlook Bullish on “Outstanding” Q2 Results

2.3%-Yielding Corning Stock Set to Soar

Corning Incorporated (NYSE:GLW) has continued to be one of the better under-the-radar 5G stocks right now.

In fact, despite market volatility, GLW stock has been trading near record levels.

As of this writing, Corning stock is up by:

  • 15% year-to-date
  • 38% year-over-year
  • 142% since bottoming on March 2020

The bullish trend for GLW stock should continue over the near and long terms. For starters, the company reported excellent financial health throughout 2020, the year that saw the global economy plunge into its worst crisis in 90 years.

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If Corning Incorporated can perform well when the world is mired in a global recession, imagine what it can do when the economy is doing well. You don’t have to dig too much to find the answer. On July 27, the company reported “outstanding” second-quarter results, and it expects the growth to continue in the third quarter.

On top of that, Corning stock provides income investors with a 2.3% dividend. GLW stock’s dividend has increased every quarter since August 2016, from $0.135 per share to $0.22 per share in August 2021. That represents a five-year increase of 63.0%. (Source: “Dividends,” Corning Incorporated, last accessed August 2, 2021.)

Moreover, in 2020, a year in which many companies cut or suspended their dividends, Corning stock maintained its dividend at $0.22 per quarter.

What’s not to love about that?

Chart courtesy of StockCharts.com

GLW Stock Overview

Corning, once known for “CorningWare” and “Corelle” bakeware, is now known for its specialty glass and ceramics that are used in mobile phones, televisions, wearables, optical fiber for broadband networks, filters for catalytic converters, and pharmaceutical glassware (including vials for vaccines). (Source: “Business Segments,” Corning Incorporated, last accessed August 2, 2021.)

The company’s business segments include Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, and Life Sciences.

The Display Technologies segment manufactures glass substrates for flat-panel liquid crystal displays (LCDs) and other high-performance display panels. Its damage-resistant “Gorilla Glass” is featured in billions of mobile devices worldwide.

Corning Incorporated’s Optical Communications segment manufactures carrier network and enterprise network components for the telecommunications industry.

The company’s Specialty Materials segment manufactures products that provide more than 150 material formulations for glass, glass ceramics, and fluoride crystals.

Corning Incorporated’s Environmental Technologies segment manufactures ceramic substrates and filters for automotive and diesel applications.

The Life Sciences segment manufactures glass and plastic labware and equipment. Its “Valor Glass,” which is a new kind of glass composition used in vaccine vials, was used to support 100 million COVID-19 vaccine doses.

Another Quarter of Great Financial Results

For the second quarter ended June 30, Corning announced that its revenue increased by 35% year-over-year and 17% over the second quarter of 2019 to $3.5 billion. (Source: “Corning Reports Outstanding Second-Quarter 2021 Results, Expects Continued Growth in Third Quarter,” Corning Incorporated, July 27, 2021.)

The company reported second-quarter net income of $449.0 million, compared to a second-quarter 2020 net loss of $71.0 million. Corning reported core net income of $459.0 million, or $0.53 per share, a 112% increase year-over-year and an 18% increase over the first quarter of 2021.

Corning Incorporated’s free cash flow came in at $471.0 million, up by $186.0 million year-over-year. Its cash flow generation during the first half of 2021 was $843.0 million.

Wendell P. Weeks, chairman and CEO, said the following:

Corning had an outstanding second quarter. We are growing faster than our underlying markets and achieved a revenue milestone of $3.5 billion, establishing a strong sales run rate. We are performing well as we continue to build a stronger, more agile company that’s consistently delivering meaningful and important contributions.

(Source: Ibid.)

Looking ahead to the third quarter, Corning expects to report revenue in the range of $3.5 to $3.7 billion and core earnings per share (EPS) in the range of $0.54 to $0.59.

Analyst Take

If sales growth, earnings growth, and a strong outlook are important to you, then Corning Incorporated should be on your radar. The company recently reported outstanding second-quarter results and, according to management, it’s “on track to deliver an outstanding year.”

During the second quarter, the company added $1.0 billion in sales year-over-year and about $500,000 in sales over its pre-pandemic levels. Corning also improved its margins, which helped drive EPS growth. The company says it’s “confident this momentum will continue,” which is good news for GLW stock investors.