Corning slides 11% as mixed Q3 outlook overshadows strong Q2 beat

Corning reported second-quarter core sales of $4.74 billion, beating analyst estimates, but shares tumbled 11% after the glass and fiber optics giant issued a mixed third-quarter outlook that disappointed investors.

"We delivered outstanding results that demonstrated progress on our newly upgraded Springboard plan," Chairman and Chief Executive Officer Wendell Weeks said.

Core earnings per share rose 30% to $0.78, also ahead of consensus. Optical Communications, the company's largest segment, posted sales of $2.07 billion, up 32% from a year earlier, driven by a 65% surge in Enterprise Networks as generative AI demand accelerated. Solar sales jumped 90%, though profitability was held back by an extended maintenance shutdown at Corning's solar wafer facility.

For the third quarter, Corning forecast core sales of $4.9 billion to $5.0 billion, with the midpoint below the $5.0 billion consensus estimate. Core EPS is expected between $0.85 and $0.89, compared with the $0.86 analyst forecast. Management said solar profitability should improve in Q3 as the ramp continues, building toward an annual revenue stream of more than $3 billion.

The stock closed at $126.01 on Tuesday, wiping out roughly $15 billion in market value and trimming a year-to-date gain that had reached 58% before the report. The company's market capitalization now stands at $123.4 billion.

Optical and AI Partnerships Drive Springboard Upgrade

Corning upgraded its long-term growth framework, dubbed the Springboard Plan, targeting an annualized sales run rate of $20 billion by the end of 2026, $30 billion by the end of 2028 and $40 billion by the end of 2030. Management expects a 19% sales compound annual growth rate from the fourth quarter of 2026 through 2030, with earnings growing faster than sales and significantly higher returns on invested capital.

The upgraded targets are underpinned by two recently announced multibillion-dollar partnerships. Amazon signed a multiyear agreement under which Corning will supply optical fiber, cable and connectivity solutions for the e-commerce giant's expanding US data center infrastructure. Separately, Nvidia entered a long-term partnership that will see Corning expand its US-based optical connectivity manufacturing capacity by 10 times and boost domestic fiber production capacity by more than 50% to meet AI factory buildout demand.

The guidance raise signals management expects AI-driven demand to accelerate across optical and data center end markets. Investors will watch the Q3 earnings call for updates on segment margin expansion and the solar ramp timeline.

This article is for informational purposes only and does not constitute investment advice.