Brigantine - BRIGANTINE ADVISORS Corning Inc HOLD(GLW...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
BRIGANTINE ADVISORS Display & Semiconductor Technologies April 29, 2010 1 Corning Inc. April 29, 2010 Darice Liu (646) 867-2337 [email protected] HOLD (GLW, $20.07) Excellent 1Q Beat and 2Q Raise, but Much Anticipated Conclusion: We believe Corning is a robust company building on its core competencies to increase its revenue opportunities (i.e. solar, environmental technologies, life sciences), while maintaining its dominant position in current markets. While near-term data points to healthy LCD glass pricing and inventory, we believe this is largely f actored into today’s share price. We are looking for catalysts, such as positive color on its new products gaining traction (thin film, gorilla glass), better industry visibility on 2H10 panel pricing and demand, and/or market share gains to drive momentum. Event: Corning reported 1Q10 results yesterday morning and exceeded Street and our estimates and provided upbeat 2Q guidance. In addition, Management revised its 2010 glass volume guidance up. Trapped in the Expectation Game. Strong execution continues at Corning, evident by solid results and guidance. From a share perspective though, GLW is frequently trapped in the expectation game heading into earnings. As we noted in our preview report, LCD industry data points to a healthy shipment and pricing environment, which bodes well for Corning (in our opinion). Consequently, the Street largely expected a “beat and raise” quarter , which management delivered. What typically dampens the enthusiasm is GLW management's tendency to err on the side of conservatism (which is pragmatic, but not well embraced by the Street). Sold 1Q10 Results. Corning reported revenues of $1.55B and EPS of $0.52. $0.04 upside was due to lower tax rate of 2% vs. the prior 10% estimate. This compares to Street expectations of $1.52B/ $0.42 and our $1.53B/$0.44, respectively. Gross margins improved 470 basis points Q/Q to 47.1%. 2010: Increased LCD Glass Growth. Looking forward, management revised its glass market outlook to 2.9 3.1 billion sq ft, from 2.8-3.0 billion sq ft. This translates into volume growth of 18%- 27% Y/Y, up from 14%-22%. Whisper Street expectations, though, were for glass volume guidance to increase to 25%+. Source: MSN Money Please see p.8 for Important Disclosures. GLW $20.07 EPS 2009A 2010E 2011E Mkt. Cap $M $31,691 1Q 0.10 0.52A 0.44 FYE Dec. 2Q 0.39 0.53E 0.48 Dil shares (M) 1,579 3Q 0.42 0.54E 0.49 52-week low $13.30 4Q 0.44 0.50E 0.46 52-week high $21.00 Year 1.35 2.09E 1.87 Avg. Vol (000) 15,160 P/E 13.4x 9.6x 10.7x Short Int. (M) 15 Revenue $M TBV/Share $9.90 1Q 989 1,553A 1,682 Price/TBV 2.0x 2Q 1,395 1,660E 1,797 Net Cash/Shr $3.94 3Q 1,479 1,727E 1,898 P/Net Cash 5.1x 4Q 1,532 1,718E 1,856 P/2011 Sales 4.4x Year 5,395 6,658E 7,231
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BRIGANTINE ADVISORS Display & Semiconductor Technologies April 29, 2010 2 1Q10 Color on Segments: Display Technologies segment sales were $782M, up 9% Q/Q. Glass volumes
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/05/2012 for the course FINANCE 101 taught by Professor George during the Spring '11 term at University of Phoenix.

Page1 / 11

Brigantine - BRIGANTINE ADVISORS Corning Inc HOLD(GLW...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online