Corning paints rosy fiber picture for 1Q14

Corning Inc. (NYSE: GLW) says its fiber-optic communications product business enjoyed a stellar end to fiscal 2013. And those spooked about 2014 based on the slower than normal fourth quarter of 2013 for systems houses may take heart in the fact that Corning expects the demand for fiber-optic network products to continue to grow in the first three months of this year.

The maker of optical fiber and glass products for a variety of other applications says its newly renamed Optical Communications segment (nee Telecommunications segment) saw sales of $605 million in the final quarter of fiscal 2013, up 12% from the $540 million earned in the year-ago quarter. Success with carriers in North America, China, and Europe drove the revenue growth.

However, the revenue growth didn’t lead to profit growth. A less favorable mix plus production shutdowns in the recently completed fourth quarter led to decline in core earnings of 18% versus 4Q12.

Looking forward, Corning expects continued revenue growth in the first quarter of this year. The company is calling for sales growth in the mid-teens on a percentage basis, which management described in a press release as “a significant improvement over the first quarter last year.” Last year’s first quarter saw revenues of $470 million, down 7% from the first quarter a year previously.

As for renaming the former Telecommunications business, Corning explained that Optical Communications better describes its product line, which has evolved from optical fiber and cable, hardware, and equipment into a broader portfolio that addresses a wider swath of the communications industry.

Overall, Corning reported GAAP total net sales of $7.8 billion for the year, down 2% annually. However, GAAP earnings per share were better at $1.34 versus $1.09. For the quarter, GAAP net sales were $1.956 billion, down 9% from 4Q12’s $2.146 billion. Yet earnings also were better than the year-ago quarter, with earnings per share of $0.30 significantly trumping those of 4Q12, which were $.10.

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