Corning Forecasts Strong Q2 Sales Amid AI-Driven Demand Surge
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Corning sees second-quarter core sales above estimates as AI boom aids demand
April 29 (Reuters) - Corning (GLW.N), opens new tab forecast second-quarter core sales above Wall Street expectations on Tuesday, aided by strong demand for its optical connectivity products used in AI-related infrastructure. Shares of the company, which also makes Gorilla Glass, rose more than 1% in premarket trading. Corning's cables and connectors are benefiting from businesses pouring money into new data center projects, which require equipment that can rapidly process data to train artificial intelligence models. "In optical communications, sales in our enterprise business were up 106% year over year on continued strong demand for our new products for Gen AI," said Corning CEO Wendell Weeks. Telecom companies' push to expand their 5G networks to cater to more users has also driven up demand for Corning's optic fiber products. Corning is also a major supplier of glass for Apple's (AAPL.O), opens new tab products and could stand to benefit from the iPhone maker's plans to invest $500 billion in the U.S. over the next four years. The specialty glass maker forecast second-quarter core sales of around $3.85 billion, compared with estimates of $3.82 billion, according to data compiled by LSEG. The company expects second-quarter adjusted earnings per share in a range of between 55 cents and 59 cents per share, compared with estimates of 56 cents. It reported first-quarter core sales of $3.68 billion, beating estimates of $3.64 billion. On an adjusted basis, the company earned 54 cents per share, compared with estimates of 51 cents. Reporting by Zaheer Kachwala in Bengaluru; Editing by Leroy Leo Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence
[2]
Corning sees second-quarter core sales above estimates as AI boom aids demand
Corning forecast second-quarter core sales above Wall Street expectations on Tuesday, aided by strong demand for its optical connectivity products used in AI-related infrastructure. Shares of the company, which also makes Gorilla Glass, rose more than 1% in premarket trading. Corning's cables and connectors are benefiting from businesses pouring money into new data center projects, which require equipment that can rapidly process data to train artificial intelligence models. "In optical communications, sales in our enterprise business were up 106% year over year on continued strong demand for our new products for Gen AI," said Corning CEO Wendell Weeks. Telecom companies' push to expand their 5G networks to cater to more users has also driven up demand for Corning's optic fiber products. Corning is also a major supplier of glass for Apple's products and could stand to benefit from the iPhone maker's plans to invest $500 billion in the US over the next four years. The specialty glass maker forecast second-quarter core sales of around $3.85 billion, compared with estimates of $3.82 billion, according to data compiled by LSEG. The company expects second-quarter adjusted earnings per share in a range of between 55 cents and 59 cents per share, compared with estimates of 56 cents. It reported first-quarter core sales of $3.68 billion, beating estimates of $3.64 billion. On an adjusted basis, the company earned 54 cents per share, compared with estimates of 51 cents.
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Corning Inc. projects higher-than-expected Q2 core sales, boosted by increasing demand for AI-related infrastructure and 5G expansion. The company's optical communications segment sees significant growth, particularly in products for generative AI applications.
Corning's Q2 Forecast Exceeds Expectations
Corning Inc., a leading manufacturer of specialty glass and ceramics, has announced a robust second-quarter forecast that surpasses Wall Street expectations. The company's optimistic outlook is primarily driven by the surging demand for its optical connectivity products, which are crucial components in AI-related infrastructure 12.
AI Boom Fuels Growth in Optical Communications
The company's optical communications segment has experienced significant growth, with enterprise business sales skyrocketing by 106% year-over-year. This remarkable increase is attributed to the strong demand for Corning's new products designed for generative AI applications. CEO Wendell Weeks emphasized the impact of AI on their business, stating, "In optical communications, sales in our enterprise business were up 106% year over year on continued strong demand for our new products for Gen AI" 12.
Data Center Expansion and 5G Networks Drive Demand
Corning's success is closely tied to the ongoing expansion of data centers and 5G networks. As businesses invest heavily in new data center projects to support AI model training, the demand for Corning's cables and connectors has surged. These components are essential for rapidly processing the vast amounts of data required for AI applications 12.
Additionally, telecom companies' efforts to expand their 5G networks have further boosted demand for Corning's optic fiber products. This dual-pronged growth in both AI infrastructure and 5G expansion has positioned Corning favorably in the market 12.
Financial Projections and Performance
Corning's financial outlook reflects its strong market position:
- Q2 core sales forecast: Approximately $3.85 billion (above analyst estimates of $3.82 billion)
- Q2 adjusted earnings per share: Expected range of $0.55 to $0.59 (analyst estimate: $0.56)
- Q1 core sales: $3.68 billion (beating estimates of $3.64 billion)
- Q1 adjusted earnings per share: $0.54 (surpassing estimates of $0.51) 12
Potential Benefits from Apple's Investment Plans
As a major supplier of glass for Apple's products, Corning stands to potentially benefit from Apple's announced plans to invest $500 billion in the United States over the next four years. This substantial investment could further drive demand for Corning's specialized glass products 12.
Market Response
The positive forecast has been well-received by investors, with Corning's shares rising more than 1% in premarket trading. This uptick reflects market confidence in the company's ability to capitalize on the growing demand for AI-related infrastructure and 5G technology 12.
Corning's strong performance and optimistic outlook underscore the significant impact of AI and 5G technologies on the specialty materials sector, highlighting the company's pivotal role in supporting the infrastructure needed for these advancing technologies.
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