CORNING INC /NY (GLW) Q3 2025 Earnings Summary

Executive Summary

• Q3 delivered record core sales ($4.27B) and core EPS ($0.67), with core operating margin expanding to 19.6% and core ROIC to 13.4%; GAAP sales were $4.10B and GAAP EPS $0.50 .
• Management guided Q4 core sales to ~$4.35B and core EPS to $0.68–$0.72, and now expects to reach the Springboard operating margin target of 20% in Q4 2025, a full year ahead of plan, citing strong GenAI and solar demand .
• Versus SPGI consensus for Q3: EPS modestly beat ($0.67 vs $0.665*), while GAAP revenue missed ($4.10B vs $4.235B*) and EBITDA was below ($0.934B vs $1.152B*)—mix and supply constraints in Optical and ramp costs in solar were noted .
• Optical Communications led growth (Net Sales +33% YoY; Enterprise +58% YoY) on GenAI products; Specialty Materials (+13% YoY) benefited from premium glass launches and Apple’s $2.5B U.S. cover glass commitment, a longer-term catalyst .

What Went Well and What Went Wrong

What Went Well

• Optical Communications strength: Net Sales +33% YoY to $1,652M and net income +69% YoY to $295M; Enterprise sales +58% YoY inside the data center on GenAI scale-out demand .
• Profitability and cash generation: Core operating margin expanded 130 bps to 19.6%; adjusted free cash flow was $535M, and core ROIC reached 13.4% .
• Strategic wins: “We now anticipate achieving the 20% target a full year ahead of plan” and Apple’s commitment “creates a significantly larger, longer-term spring” in Mobile Consumer Electronics .

What Went Wrong

• GAAP revenue and EBITDA missed consensus, with GAAP Net Sales at $4.10B vs $4.235B* and EBITDA $0.934B vs $1.152B*; management cited timing and supply bottlenecks in Optical as demand exceeded supply .
• Display net sales down 7% YoY (to $939M) despite slightly higher sequential sales; price was flat versus Q2 and retail market view unchanged, highlighting limited pricing tailwind .
• OpEx came in above normalized run rate at $826M, driven by higher variable and stock-based compensation as the stock rallied; solar wafer ramp also temporarily pressured margins (~$0.03 EPS impact in Q4 outlook) .

Financial Results

Consolidated Results vs Prior Periods

Q3 2025 Actual vs SPGI Consensus

Values with asterisk (*) retrieved from S&P Global.

Segment Net Sales

Segment Net Income

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered another excellent quarter. Year over year, core sales grew 14% to $4.27 billion, and core EPS grew 24% to $0.67… we now expect to reach our Springboard operating margin target of 20% in Q4 2025, a year ahead of plan.” — Wendell P. Weeks, CEO .
• “Third-quarter sales grew 33% year over year to $1.65 billion [Optical], highlighted by 58% year-over-year growth in our enterprise networks business… Optical net income grew twice as fast as sales, up 69%.” — Ed Schlesinger, CFO .
• “We introduced a high-density GenAI fiber and cable system… fit anywhere from two to four times the amount of fiber into existing conduit… we expect it to be a billion-dollar business by the end of the decade.” — CEO .
• “Over the last 18 months, we have built the largest solar ingot and wafer facility in the United States… moving from producing thousands of wafers a day to more than a million a day.” — CEO .

Q&A Highlights

• Optical growth vs expectations: Management emphasized timing and supply availability by SKU; demand exceeds supply, with IR offering to help framing quarter-to-quarter modeling .
• Margin trajectory: Operating margin at 20% creates strong return profile; solar ramp costs will fade as capacity normalizes; potential for margin >20% over time .
• Supply constraints and capacity: Lead times tight; evaluating customer commitments/co-funding to de-risk expansions; Hickory facility expansion referenced externally by analysts .
• Solar ramp amid tariffs/duties: Downstream inventories pre-duties acknowledged; GLW’s U.S.-origin positioning makes it a preferred supplier, mitigating volatility .
• Apple investment economics: Long-term co-innovation expected to drive “more Corning” content and returns; profitability tied to adoption of innovations rather than co-investment mechanics .

Estimates Context

• Q3 2025 vs SPGI consensus: EPS beat ($0.67 vs $0.665*), GAAP revenue miss ($4.10B vs $4.235B*), EBITDA below ($0.934B vs $1.152B*)—mix and supply constraints plus solar ramp costs likely contributed .
• Q4 2025: Guidance of core EPS $0.68–$0.72 brackets consensus ($0.7032*); core sales guide (~$4.35B) aligns closely with revenue consensus ($4.351B*) .
• Target price consensus mean: $92.75* (12 estimates), unchanged quarter-on-quarter*.

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

• Core execution remains strong: EPS growth outpacing sales, with operating margin poised to hit 20% one year early; supports multiple expansion and buyback-driven EPS accretion .
• GenAI is the structural growth engine: Enterprise fiber/cable demand is robust and supply-constrained; DCI product set shows accelerating uptake and billion-dollar potential by decade-end .
• Solar is a new growth leg: U.S. ingot/wafer ramp at scale with >80% capacity committed; near-term margin headwinds (~$0.03 EPS in Q4) should fade as volume normalizes .
• Mobile CE tailwinds: Apple’s $2.5B U.S. cover glass commitment enhances long-term Specialty Materials growth and margin potential via “more Corning” content .
• Watch GAAP vs core optics: Core metrics are strong, but consensus comparisons generally reference GAAP revenue/EBITDA—be mindful of non-GAAP adjustments and FX constant-currency treatments .
• Near-term catalyst path: Achieving 20% operating margin in Q4, GenAI product scaling, and solar wafer volume ramp are likely stock drivers; monitor capacity expansions and customer co-funding developments .
• Risk checks: Pricing stability in Display, tariff impacts, and supply bottlenecks remain monitoring points; guidance embeds temporary ramp costs and assumes continued demand strength .