Quick highlights from yesterdays earnings announcement.
-$.13 EPS versus $.20 consensus estimate
-Revenues of $1.1 billion versus $1.16 billion consensus estimate.
-Reducing work force by 13% or 3,500 jobs.
-Corporate restructuring which will result in immediate charge of between $116-$165 million, leading to annualized savings of between $150-$200 million.
-Expecting to reduce prices to unload inventories in Q1, reducing margins.
Seems like a whole lot of bad news for one day. The stock responded by losing 7% almost immediately and ended up a half percent. Today the day after earnings GLW was up 8.81%. After miserably missing earnings GLW is up over 9% in two days. This really isn't surprising because of the deep discount it continues to trade at. Corning can miss earnings for the next few quarters and still be in good shape relative to our purchase price. The only concern of mine is the fact that guidance was really off. Even managements revised earnings weren't even close. Overall these earnings should have been expected due to the weak Q4 retail numbers which have been coming out.
Just wanted to touch on a few positives. First BMW has been pushing its new diesel cars. The claim is that these cars are more fuel efficient and produce less emissions. Corning produces a piece for catalytic converters in diesel engines which is becoming the standard in the industry. Hopefully this new type of car will help counter some lost revenues from weak truck sales. Another positive is at the end of December Emory University purchased Corning's new EPIC system which allows the mass testing of new drug compounds. The group is up 20.38% since the purchase in late November.
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