CORNING INC /NY (GLW) Q2 2025 Earnings Summary

Executive Summary

Corning delivered an outstanding Q2 2025, with GAAP net sales $3.86B, core sales $4.05B, GAAP diluted EPS $0.54, and core EPS $0.60; core operating margin expanded to 19.0% and adjusted free cash flow rose to $451M .
Results beat Wall Street consensus: core EPS $0.60 vs Primary EPS consensus $0.571*, and GAAP net sales $3.862B vs revenue consensus $3.837B*, with Optical Communications enterprise sales up 81% YoY and carrier strength returning .
Q3 2025 guidance: core sales $4.2B and core EPS $0.63–$0.67, with ~$0.01–$0.02 EPS headwind from tariffs and ~$0.02–$0.03 temporary ramp costs; display segment now expected at the high end of $900–$950M net income for FY25 with ≥25% margin .
Narrative/catalysts: strong GenAI demand (inside data center and DCI) and U.S.-made solar ramps underpin momentum; management emphasized “More Corning” content and Springboard plan progress, positioning for durable growth through 2026+ .

What Went Well and What Went Wrong

What Went Well

Record core sales and core EPS with margin expansion; CFO highlighted “powerful incrementals” and ROIC up to 13.1% .
Optical Communications strength: enterprise sales +81% YoY; segment net sales $1.566B (+41% YoY) and net income $247M (+73% YoY) on GenAI products and carrier normalization .
Cash generation: GAAP operating cash flow $708M and adjusted free cash flow $451M, both up YoY, supporting buybacks and growth investments .

Quote: “We delivered an outstanding second quarter… core sales up 12%… core EPS… $0.60… driving… profitable growth outlined in our… Springboard plan.” – CEO Wendell Weeks .

What Went Wrong

Display sales declined YoY to $898M (-11% YoY), despite stable sequential trends; net income flat QoQ and down YoY .
Automotive sales $460M, down 4% YoY on weaker light/heavy-duty markets in Europe and North America, though net income improved on manufacturing performance .
Hemlock & Emerging Growth: net loss of ($10)M in Q2 (ramp costs) despite sales growth, with ramp expenses expected to continue near term .

Analyst concern: temporary pull-forward ahead of tariffs impacted Specialty Materials and Display; management said Q3 guidance already adjusts for this normalization .

Financial Results

Consolidated Summary vs Prior Periods and Estimates

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue (GAAP, $USD Millions)	$3,251	$3,452	$3,862
Core Sales ($USD Millions)	$3,604	$3,679	$4,045
Diluted EPS (GAAP, $)	$0.12	$0.18	$0.54
Core EPS ($)	$0.47	$0.54	$0.60
Primary EPS Consensus Mean ($)*	0.470	0.512	0.571
Revenue Consensus Mean ($USD Millions)*	3,578	3,630	3,837

Values retrieved from S&P Global.*

Observations:

EPS beat: $0.60 vs $0.571*; revenue beat: $3.862B vs $3.837B* .
Sequential growth: GAAP revenue +12% QoQ; core sales +10% QoQ .

Margins (YoY Comparison)

Metric	Q2 2024	Q2 2025
GAAP Gross Margin %	29.2%	36.0%
Core Gross Margin %	37.9%	38.4%
Core Operating Margin %	17.4%	19.0%

Segment Breakdown (Net Sales, Net Income)

Segment	Metric	Q2 2024	Q1 2025	Q2 2025
Optical Communications	Net Sales ($MM)	$1,113	$1,355	$1,566
Optical Communications	Net Income ($MM)	$143	$201	$247
Display	Net Sales ($MM)	$1,014	$905	$898
Display	Net Income ($MM)	$258	$243	$243
Specialty Materials	Net Sales ($MM)	$501	$501	$545
Specialty Materials	Net Income ($MM)	$63	$74	$81
Automotive	Net Sales ($MM)	$479	$440	$460
Automotive	Net Income ($MM)	$71	$68	$79
Life Sciences	Net Sales ($MM)	$249	$234	$250
Life Sciences	Net Income ($MM)	$17	$13	$18
Hemlock & Emerging Growth	Net Sales ($MM)	$248	$244	$326
Hemlock & Emerging Growth	Net (Loss) Income ($MM)	$3	($16)	($10)

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
GAAP Operating Cash Flow ($MM)	$521	$521	$708
Adjusted Free Cash Flow ($MM)	$450	$353	$451
Core ROIC %	11.0%	—	13.1%
Capital Expenditures ($MM)	$516	$242	$308

Non-GAAP adjustments: The GAAP-to-core EPS delta reflects constant currency, translated earnings contracts, FX translation of foreign-denominated debt, acquisition-related costs, discrete taxes, restructuring, and other items; core effective tax rate was 19.5% in Q2 2025 vs 22.0% in Q2 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core Sales	Q3 2025	—	~$4.2B	New
Core EPS	Q3 2025	—	$0.63–$0.67	New
EPS impact from tariffs	Q2 2025	~$0.01–$0.02	—	As guided
EPS impact from tariffs	Q3 2025	—	~$0.01–$0.02	Maintained
Ramp costs (GenAI/solar) EPS impact	Q2 2025	~($0.03)	—	As guided
Ramp costs (GenAI/solar) EPS impact	Q3 2025	—	~($0.02–$0.03)	Slightly lower vs Q2
Display net income	FY 2025	$900–$950M	High end of range; margin ≥25%	Raised within range
CapEx	FY 2025	~$1.3B	~$1.3B	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
GenAI – Inside data center (enterprise)	Q4: enterprise +93% YoY; Q1: enterprise +106% YoY; strong adoption and capacity ramps	Enterprise +81% YoY; margin rising; tight supply on new products	Strong, sustained growth
GenAI – DCI (carrier long-haul rebuild)	Product commercialized; 3 customers; reserved 10% fiber capacity 2025–26	Early stage, scaling; potential $1B opportunity by decade-end; more customer announcements expected	Building momentum
Tariffs/macros	Direct tariff impact minimal ($0.01–$0.02/quarter); U.S. footprint hedges exposure; customers pulling forward	Guidance embeds tariffs ($0.01–$0.02) and ramps; pull-forward in Gorilla/Display normalized in Q3 guide	Managed headwind
Display	Price hikes to maintain USD net income; guided $900–$950M FY25	Tracking to high end; ≥25% margin; Q3 volume/pricing similar to Q2	Stable profitability
Solar (Hemlock)	Plan to $2.5B revenue by 2028; U.S.-made ingots/wafers; capacity largely sold via LTAs	Wafer facility online in Q3; ramp costs temporary; shipments later in year	Ramping
Automotive	New segment; softness in EU/NA heavy-duty; growth from more content	Sales -4% YoY; net income +11% YoY on manufacturing gains	Mixed: sales soft, profit improving

Management Commentary

Strategy: “Key secular trends and our ‘More Corning’ content strategy drove demand… we continued to capture… profitable growth outlined in our… Springboard plan.” – CEO .
Springboard progress: Sales +24% vs launch, operating margin 19% vs 20% target by 2026, EPS +54%, ROIC +430 bps; upgraded plan by $1B in March .
GenAI upside: Scale-out drives fiber volume; scale-up via CPO could be 2–3x enterprise business if successful; DCI enabling denser fiber; agreements with leading customers .
Solar thesis: Low-risk, high-return re-entry, domestic manufacturing footprint, LTAs covering capacity, modules/wafers strategy; ramp costs near term .
Capital allocation: Strong dividend; buybacks as primary return; long average debt maturity (~21 years) and continued repurchases .

Q&A Highlights

Tariff pull-forward: Seen in Gorilla and Display; Q3 guide adjusted to reflect normalization; management conservatively embeds this in guidance .
Solar ramp costs: Wafer factory ramp costs continuing into Q3, improving over time with utilization and sales; commercialization in Q3 with shipments later in year .
Optical capacity/pricing: Tight on new products; pricing set to enhance margins; incremental margin rising; lead times flexible for bespoke connectivity; core components ramping as equipment is retooled .
Margins trajectory: Incremental margins improving as sales scale and cost structure managed; marching toward 20% operating margin .

Estimates Context

Q2 2025 actual vs consensus: EPS $0.60 vs $0.571*; revenue $3.862B vs $3.837B*, both beats .
Q1 2025 beats: EPS $0.54 vs $0.512*; revenue $3.452B vs $3.630B* (revenue miss, EPS beat)*.
Q3 2025 context: Company guides core EPS $0.63–$0.67 and core sales $4.2B; consensus EPS ~$0.665* and revenue ~$4.234B*, implying guidance EPS roughly in line and sales slightly below consensus on core vs GAAP framing .