CORNING INC /NY (GLW) Q1 2025 Earnings Summary

Executive Summary

Q1 delivered above guidance on core metrics: Core sales rose 13% y/y to $3.68B and core EPS rose 42% y/y to $0.54; GAAP sales were $3.45B and GAAP EPS $0.18 . Optical Enterprise demand for Gen AI products drove 106% y/y growth; Display maintained strong profitability with 26.9% net income margin .
Versus S&P Global consensus, GLW beat EPS and came in below on revenue: EPS $0.54 vs $0.512*; GAAP revenue $3.45B vs $3.63B* (see table) (Values retrieved from S&P Global).
Q2 guidance: Core sales ≈$3.85B and core EPS $0.55–$0.59; guidance embeds ~$0.01–$0.02 EPS headwind from tariffs and ~$0.03 temporary ramp costs for GenAI/solar .
Execution catalysts: accelerating U.S. solar wafer ramp (workforce lifted to ~1,500; capacity essentially sold out for 2025) and continued Enterprise AI adoption; management reiterated the Springboard plan to add >$4B annualized sales and reach 20% operating margin by end-2026 .

What Went Well
- Optical Enterprise strength: “Enterprise sales were $705 million for the quarter, up 106% [y/y]” on Gen AI product adoption .
- Display profitability proof-point: “We successfully implemented double-digit price increases… Q1 net income margin 26.9%” .
- Springboard confidence intact: “We reiterate our… plan to add more than $4 billion in annualized sales and… operating margin of 20% by the end of 2026” .
What Went Wrong
- Auto market softness: Automotive sales $440M, down 10% y/y, with continued weakness in European/North American light- and heavy-duty markets .
- Life Sciences sluggish: Sales $234M, down 1% y/y; net income flat at $13M .
- GAAP optics: GAAP net income and EPS down 25% y/y to $157M and $0.18, respectively, driven by mark-to-market FX items and other non-core factors .

Metric	Q3 2024	Q4 2024	Q1 2025
GAAP Net Sales ($B)	3.391	3.501	3.452
Core Sales ($B)	3.733	3.874	3.679
GAAP Diluted EPS ($)	-0.14	0.36	0.18
Core EPS ($)	0.54	0.57	0.54
GAAP Gross Margin %	33.5%	34.2%	35.2%
Core Gross Margin %	39.2%	38.6%	37.9%
GAAP Operating Margin %	8.9%	11.2%	12.9%
Core Operating Margin %	18.3%	18.5%	18.0%

Q1 2025 actuals vs S&P Global consensus

Metric	Actual	Consensus*	Surprise
EPS ($)	0.54	0.51221*	+$0.03
GAAP Revenue ($B)	3.452	3.63036*	-$0.18

Values retrieved from S&P Global.

Segment net sales

Segment Net Sales ($M)	Q1 2024	Q4 2024	Q1 2025
Optical Communications	930	1,368	1,355
Display	872	971	905
Specialty Materials	454	515	501
Automotive	491	446	440
Life Sciences	236	250	234
Hemlock & Emerging Growth	275	324	244

Selected KPIs

KPI	Q1 2025	Prior/Context
Enterprise (Optical) sales ($M)	705	+106% y/y
Display net income margin	26.9%	Pricing actions H2’24; NI target $900–$950M in FY25
Core ROIC	11.6%	+300 bps y/y
Operating Cash Flow ($M)	151	Q1 typically seasonal low
Adj. Free Cash Flow ($M)	-1	2024 FCF $1.25B
Quarterly dividend ($/sh)	0.28 (declared May 1)	Payable Jun 27, 2025

Metric	Period	Previous Guidance	Current Guidance	Change
Core Sales	Q2 2025	—	≈$3.85B	New
Core EPS	Q2 2025	—	$0.55–$0.59	New
EPS Tariff Impact	Q2 2025	—	~$0.01–$0.02 headwind	New
EPS Ramp Cost Impact (GenAI/Solar)	Q2 2025	—	~-$0.03 temporary	New
Display Segment Net Income	FY 2025	$900–$950M (Q4 guide)	$900–$950M (reaffirmed)	Maintained
CapEx	FY 2025	—	≈$1.3B	New
Dividend	Q2 2025	—	$0.28/sh declared (payable Jun 27)	Declared

Topic	Previous Mentions (Q-2: Q3’24)	Previous Mentions (Q-1: Q4’24)	Current Period (Q1’25)	Trend
AI/GenAI optical (Enterprise)	Enterprise +55% y/y; strong adoption	Enterprise +93% y/y	Enterprise +106% y/y; $705M sales	Accelerating
Carrier fiber	—	—	Inventory drawdown done; growth resuming in 2025; DCI product commercialized	Improving
Solar ramp	—	—	US-made ingot/wafer commercialization in 2H25; 2025 capacity sold; workforce to ~1,500	Ramping
Display pricing/profit	Price increases; 2025 NI $900–$950M target	Reiterated Display NI target	Q1 NI margin 26.9%; target reaffirmed	Stable/strong
Tariffs/supply chain	Risk disclosures	—	Direct impact minimal ($0.01–$0.02 EPS); 90% US revenue from US-origin products	Manageable
Automotive	Enviro Tech softness; HD diesel downcycle	Environmental -7% y/y	Auto sales -10% y/y; segment created	Near-term soft
Life Sciences	+6% y/y	+3% y/y	-1% y/y	Flattening

“We delivered outstanding first quarter results that exceeded guidance. We grew sales 13% y/y to $3.7 billion… EPS… to $0.54. We expanded operating margin… to 18%” .
“For Q2, we expect… sales ≈$3.85 billion… EPS $0.55 to $0.59, including… tariffs ($0.01–$0.02) and… ramp costs (~$0.03)” .
“The direct impact of currently enacted tariffs is not significant for Corning” .
“Enterprise sales were $705 million… up 106%” .
“We remain confident that we can deliver [Display] net income of $900 million to $950 million in 2025 and… margin of 25%” .

Pricing power: Management cited prior success passing inflation and sees pricing tailwinds in solar (U.S.-sourced demand) and margin opportunity in next-gen optical as supply remains tight .
Ramp costs vs CapEx: Ramp expenses are mainly fixed OpEx during scale-up; 2025 CapEx guidance steady at ~$1.3B; optical capacity adds are not CapEx-intensive .
GenAI visibility: Quarterly reviews with hyperscalers reinforce growth outlook; demand across customers tends to balance changes by any single buyer .
Tariffs/customer relocation: Minimal direct impact; company prepared for regional shifts (e.g., India/Vietnam finishing) to support customers’ supply chain optimization .
Display outlook: TV units roughly flat (~207M) with ~1” diagonal growth; Q2 panel utilization expected to normalize after slightly elevated Q1 .

Q1 2025: EPS beat; revenue miss vs S&P Global consensus: $0.54 vs $0.512* (+$0.03) and GAAP revenue $3.45B vs $3.63B* (-$0.18B). Management’s focus on core metrics (core sales $3.68B) and margin expansion underpinned the EPS beat (Values retrieved from S&P Global).
Q2 2025 setup: Company guides core sales ≈$3.85B and core EPS $0.55–$0.59 . S&P Global consensus sits near EPS ~$0.571* and revenue ~$3.84B*, implying guidance brackets EPS consensus and is broadly in line on revenue (Values retrieved from S&P Global).

Enterprise AI remains a powerful growth engine; triple-digit y/y growth sustained with commercialization of data center interconnect products and multiple Tier-1 adopters .
Display profitability is durable post-pricing actions; Q1 margin of 26.9% supports the $900–$950M FY25 NI target despite yen volatility and constant-currency reset to ¥120 .
Near-term headwinds in Automotive and Life Sciences persist, but structural content gains in auto glass and macro-resilient solar ramp offer medium-term offsets .
Q2 guide is constructive with EPS growth outpacing sales; embedded headwinds (tariffs, ramp costs) quantify downside and should fade in 2H as scale effects kick in .
Cash conversion improving; Q1 seasonally low but 2025 FCF expected to strengthen; capital returns continue via buybacks alongside stable $0.28 dividend .
Strategic U.S. manufacturing footprint (90% US revenue from US-origin products) limits tariff risk and may be a demand catalyst as customers prioritize domestic sourcing .

Citations

Note on estimates: Values marked with an asterisk (*) are retrieved from S&P Global.