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Interesting Performance from Corning (GLW) this Week

Posted on | October 14, 2008 Time: 2:01 pm |

Shares of Corning (GLW) have been holding up surprisingly well considering that Philips NV warned on slowing TV sales yesterday, and Samsung reiterated this morning.

Samsung is a the world’s largest maker of LCD TV’s, and as good a bellwether for the HD industry as you’ll find. Their joint venture with Corning was about the only bright spot of Corning’s operating business, and now that one is confirmed to be seeing rapidly declining consumer demand. I still love the company’s environmental and fiber businesses, but they will be marginal providers for the next few quarters…at best.

As I mentioned last week, the market (as of last Friday morning) was pricing in terrible third quarter earnings and terrible 4th quarter guidance. Corning had already given their warning last week, so I am happy to see that they didn’t breach new lows on further weakening of the industry outlook.

Over the medium-term, I’m still looking for Corning to prove they can earn profits during a recession. They didn’t exactly inspire confidence during the 2000-2002 time period; those who have been hovering around this company for a long time still remember $3.00 share prices. I am banking on Corning learning those valuable lessons of capital spending (keep reducing!) and modesty over the next year.

If they can navigate this period well, they will earn fantastic cash returns on equity and begin to get a valuation floor much higher than what the current “respect meter” registers on Wall St. - on the plus side, the one side benefit of having the stock price cut in half is that next year’s stock gift just became 50% cheaper.

in early trading GLW shares are up about 1% at $14.20, but expecting them to falter…

More on this topic (What's this?)
Dividend Stock Review: Corning (GLW) (The DIV-Net, 9/20/08)
“One Technology Can Keep America from Going Dark” (Money Map VIP Trader) (Stock Gumshoe, 2/18/10)
Be Flexible! (The Iconoclast Investor, 9/3/08)
Read more on Corning, Samsung Electronics at Wikinvest
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