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Corning reported a sharp increase in third-quarter sales and profit Tuesday as demand for optical communications products accelerated, with sales of products for generative artificial intelligence more than doubling from a year earlier.
The company said Optical Communications sales rose 44% to $2.38 billion. Within that business, Enterprise Networks sales increased 84%, showing how investment in AI infrastructure is reaching the physical connections that move data, rather than benefiting only the makers of computing chips.
Corning’s total sales under generally accepted accounting principles rose 18% to $4.855 billion. Net income attributable to Corning increased 58% to $680 million, while diluted earnings rose to 78 cents a share from 50 cents.
AI growth reaches the network
Chief Executive Wendell Weeks said faster adoption of Corning’s optical innovations helped its generative-AI product sales grow more than 100%, outpacing growth in graphics-processing-unit shipments. That comparison is the company’s assessment, not a separate industry shipment forecast.
Corning said it secured four long-term, multibillion-dollar customer agreements during the quarter, including with Verizon and AT&T. Those agreements help support expansion plans by sharing the cost and risk of adding capacity with customers, Chief Financial Officer Ed Schlesinger said.
The company invested more than half a billion dollars in capital expenditures during the quarter to meet demand, while generating $1.06 billion in operating cash flow and $661 million in adjusted free cash flow.
For the wider economy, the results show a second layer of the AI spending cycle: larger computing systems require more connectivity and manufacturing capacity.
Solar grows, but the ramp is slower
Corning’s Solar business increased sales 37% from a year earlier as production expanded, though the company said the ramp was slower than anticipated. It expects better productivity to improve output and profitability as it works toward a solar revenue stream of more than $3 billion.
The company also said U.S. trade action under Section 232 during the quarter improved the pricing environment and demand for U.S.-made solar products.
In Glass Innovations, Corning said its products outperformed the markets for televisions, notebooks and smartphones, which it said have been affected by memory pricing. It attributed that performance to getting more Corning content into customers’ products.
Another strong quarter projected
Corning’s preferred core sales measure increased 19% to $5.081 billion, while core earnings rose 36% to 91 cents a share. Core results are non-GAAP measures; the company said the difference from reported earnings principally reflected adjustments for hedged exposures and discrete tax items.
For the fourth quarter, Corning forecast core sales of $5.2 billion to $5.3 billion, approximately 19% growth from a year earlier, and core earnings of 96 cents to $1 a share, about 36% growth.
Those are quarterly forecasts. Separately, its longer-term Springboard plan targets an annualized sales pace of $20 billion by the end of 2026, $30 billion by the end of 2028 and $40 billion by the end of 2030. An annualized pace describes the rate of sales at a point in time, not the revenue already booked across an entire year.
JBizNews Desk | Corning, New York
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