Corning stock pops 10% on AI-driven boost to Q2 outlook

Shares of Corning Inc (NYSE: GLW) are up nearly 10% on Monday after the specialty glass maker raised its guidance for its current financial quarter. 

The multinational attributed its confidence to solid demand for its optical connectivity products for artificial intelligence. 

Corning stock is now up close to 40% versus the start of 2024. 

Corning stock gains on raised guidance

Corning now forecasts its sales to come in at $3.6 billion in the second quarter. Its previous guidance was for $3.4 billion. 

Core per-share earnings, the New York listed firm added, will now print at 45 cents or more. Wendell Weeks – the chief executive of Corning Inc said in a press release today:

These results reinforce our confidence in Springboard – Corning’s plan to add more than $3.0 billion in annualised sales in the next three years as cyclical factors and secular trends combine.

Corning stock is currently down more than 5.0% versus its high in 2021. 

GLW committed to profitability and cash flow

Corning is convinced that its Q1 (reported in April) will be the weakest quarter of 2024. 

Its core sales were down 3.0% on a year-over-year basis but its core gross margin, nonetheless, improved by 160 basis points in Q1. CEO Weeks also said on Monday:

Because of our confidence in Springboard, we began buying back our shares in the second quarter. We’re energised by the tremendous opportunity for value creation we’ve built for our shareholders.

GLW management also reiterated its commitment to delivering strong incremental profit and cash flow today. Wall Street currently has a consensus “overweight” rating on Corning stock. 

Corning recently announced quarterly dividend

The news arrives a couple weeks after the maker of glass for mobile phones and big screen TVs announced 28 cents a share of quarterly cash dividend. 

Corning remains confident that its technical capability and production capacity positions it to “capture significant growth with powerful incremental profit and cash flow”. 

GLW will report its full financial results for the second quarter on July 30th. 

In June, analysts at Morgan Stanley downgraded Corning stock from “overweight” to “equal weight”. They did, however, raise their price objective on GLW shares to $38. 

The investment firm agreed that Corning Inc will likely continue to perform well through 2024 – but the related benefit, its analysts told clients, was already factored into its stock price. 

Note that the tech company is already trading comfortably above $40 at writing, which is well above the MS price target.