Gen AI Demand Ignites Corning Q1 Optical Communications Sales, Sees Continued Growth In Q2 Despite Tariff Woes

by Lekha Gupta Benzinga Editor

Zinger Key Points

Corning shares rose premarket after beating both core sales and core EPS estimates, with sales up 13% Y/Y.
Strong growth in Optical Communications, especially driven by Gen AI products, was a key contributor to the positive results and outlook.
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Corning Inc GLW shares are trading higher after the company reported first-quarter 2025 results.

Core sales grew 13% year-on-year (Y/Y) to $3.68 billion, beating the analyst consensus estimate of $3.64 billion.

The Apple glass supplier's core EPS of 54 cents beat the analyst consensus estimate of 51 cents.

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As of January 1, 2025, Honeywell reorganized its business segments, moving the Automotive Glass Solutions business from the Hemlock and Emerging Growth Businesses into the newly formed Automotive segment, where it is now managed alongside Environmental Technologies.

Display Technologies' sales grew by 4% Y/Y to $905 million. Optical Communications sales increased by 46% Y/Y to $1.355 billion, led by continued strong adoption of Corning's new Gen AI products.

In Optical Communications, Enterprise business sales rose 106% Y/Y, led by strong demand for the new Gen AI products.

Specialty Materials sales rose 10% Y/Y to $501 million in the quarter. Life Sciences sales fell 1% Y/Y to $234 million.

Hemlock and Emerging Growth Businesses sales decreased 11% Y/Y to $244 million in the quarter.

The core gross margin was 37.9% in the quarter, an improvement of 110-basis-point year-over-year.

Outlook: In the second quarter, the company expects to grow core sales to around $3.85 billion (vs. the consensus of $3.82 billion) and increase core EPS significantly faster than sales, in a range of $0.55-$0.59 (vs. the street view of $0.56).

The guidance reflects the impact of currently enacted tariffs of around $0.01-$0.02, along with a $0.03 temporary increase in cost to meet increased demand for Gen AI and solar products.

Wendell P. Weeks, chairman and chief executive officer, said, “We remain confident in our ability to deliver our Springboard plan. We’re well positioned to maintain momentum despite a dynamic external environment because our growth is underpinned by powerful secular trends that are underway today.”

Investors can gain exposure to GLW via ProShares Smart Materials ETF TINT and Professionally Managed Portfolios Otter Creek Focus Strategy ETF OCFS.

Price Action: GLW shares were up 1.70% at $44.85 premarket at the last check Tuesday.

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