Corning: LCD Play and More

Posted Apr 30th 2010 3:30PM by Joseph Lazzaro
Filed under: Corning Inc (GLW), Stocks to Buy

Is Corning's Inc. (GLW) latest quarterly performance signaling something about the drivers of U.S. GDP growth in the years ahead? Perhaps.

Corning, the world's largest manufacturer of liquid crystal displays, reported first quarter earnings of 52 cents per share on strong demand for flat-screen TVs in China. The performance trounced the 45 cent Thomson/Reuters First Call first quarter estimate.

First quarter revenue rose 57% to $1.55 billion, compared to the First Call estimate of $1.58 billion.

Wall Street's initial response has been negative, with the shares falling about 60 cents to $19.65 following the release of quarterly results.

Corning also said it sees higher-than-expected demand for LCD televisions, laptops, and desktop computer screens, and the company now sees the 2010 LCD glass market totaling 2.9-3.1 billion square feet, up from the previous estimate of 2.8-3.0 billion square feet.

The First Call FY2010/FY2011 EPS estimates for GLW are $1.81 to $1.99.

Stock Analysis: Although Corning benefited from easy year-over-year comparisons (called 'easy comps'), due to the 2009 recession, export demand for flat screens in key emerging markets, particularly in China and India, suggests better days are ahead for GLW, and I like the shares here. Hence, view Wall Street's muted response as a good time to scoop-up shares. More-cautious investors can wait until Corning closes above $20 for three consecutive days before considering the shares. I'd put a sell/stop loss at $8.50.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: Corning, glw