Corning Inc. Rallies on Q1 Earnings

First-quarter earnings has officially kicked off, and it’s shaping up to be the best earnings season since 2011. I love earnings season, because it’s a time where fundamentally superior stocks get their chance to shine. FactSet expects the S&P 500 to post 9.2% annual earnings growth and 7.1% sales growth.

During this busy time, there are going to be plenty of buying opportunities. Today, one of my Dividend Growth stocks is rallying after beating analysts’ earnings expectations by 11%. So let’s take a look…

Corning Inc. (GLW) has produced specialty glass, ceramics and optical physics products for more than 160 years. Operating out of five distinct business segments–Display Technologies, Environmental Technologies, Optical Communications, Life Sciences and Specialty Materials–Corning’s products are used in high-resolution consumer electronics, in vehicle emissions controls, in wireless and carrier communications, in life-saving medical tools and glass covers.

Corning also remains committed to innovation, investing heavily in research and development. In fact, the company has invested double what its peers have in R&D. On average, Corning invests about 9% of sales to R&D, while its competitors only invest about 4%. And this investments continues to pay off, as demonstrated by today’s first-quarter report.

Compared with the year ago quarter, revenue rose 16% to $2.38 billion. This topped the $2.37 billion consensus estimate. Over the same period, earnings per share skyrocketed 514% to $0.43. Excluding special items, adjusted earnings per share was $0.39. Analysts were looking for $0.35 EPS, so Corning Inc. posted a hefty 11.4% earnings surprise.

Corning Inc. also reaffirmed its commitment to its shareholders. The company plans to return more than $12.5 billion to shareholders between 2016 and 2019. Last quarter alone, Corning returned over $550 million to shareholders between dividends and stock buybacks. Corning Inc. also plans to invest $10 billion in growth opportunities between 2016 and 2019.

As an added bonus, GLW has a solid dividend yield of 2.3%. GLW will likely declare its next dividend sometime over the next few days.

GLW is a rare stock that rates highly in both Portfolio Grader and Dividend Grader, so I currently recommend it as a strong buy.


Louis Navellier

Louis Navellier

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