Corning stock fell over 4% on Tuesday morning after the company reported a weaker-than-expected outlook for the current quarter, blaming slow smartphone glass sales.
Corning makes a variety of different components and supplies many of the top electronics companies, like Samsung and Apple, which reports earnings this week amid concern over slowing consumer electronics sales. But there is optimism that slowing electronics sales won't hurt the high-end of the market as much as less expensive devices.
Corning said it expected $3.55 billion in core, or adjusted, sales for the fourth quarter, short of a FactSet analyst consensus of $3.75 billion.
The company said that it would wait to see positive signs before telling investors about future recovery in the business.
In the quarter ending in September, Corning saw smartphone unit sales decline 14% on an annual basis, and tablet and notebook demand fall 17%, Corning CEO Wendell Weeks said on an earnings call. He added that annual automotive production is also behind its previously expected pace.
"So now the question is, when will the glass market recover?" asked Weeks. "My answer is we would like to see additional positive evidence before we guide a robust recovery in glass demand."
Corning's biggest business is making cables and components for fiber-optic systems, which grew 16% to $1.31 billion during the quarter.
But the company saw a 28% annual decline during the quarter to $686 million in sales in its displays technologies division, which makes glass for smartphones and other computer displays.
And the consumer electronics slowdown doesn't seem to be getting better this year, Weeks said.
"We now expect smartphones to be down about 12% for the year, and we expect notebook and tablet demand to decline 15%," Weeks said. "We expect the year-over-year decline in smartphones, notebooks and tablets to be greater in the second half than in the first half."
Corning reported third-quarter sales of $3.49 billion, under FactSet's consensus of $3.66 billion, and adjusted earnings per share of 51 cents, in line with expectations.
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October 25, 2022 at 08:53PM
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Apple glass supplier Corning warns smartphone and tablet sales slowed down this quarter - CNBC
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