Corning sees non-optical weakness amid data-center business boom

Corning forecast second-quarter revenue below Wall Street estimates on Tuesday, as weakness in non-optical segments continues to pressure ​business despite strong demand for data center products.

Shares of the ‌gorilla glass maker fell more than 5% in early trading.

Slower replacement cycles for electronics and cautious consumer spending amid persistent economic uncertainty have pressured Corning’s business, offsetting gains ​in its optical communications segment.

The earnings outlook is partly weighed ​by an extended maintenance shutdown of Corning’s solar wafer facility ⁠as well as limited growth drivers in non-optical segments, which still contribute ​significantly to revenue and earnings, J.P. Morgan analysts said.

For the second quarter ​ending June 30, the company expects core sales of about $4.6 billion, below analysts’ average estimate of $4.63 billion, according to data compiled by LSEG.

Corning, a key supplier to Apple, ​has been hurt by softer global smartphone demand, which has weighed ​on volumes for its specialty glass products, particularly in display technologies.

Net sales in the ‌glass innovations ⁠segment, which includes display and specialty materials, rose 1% to $1.42 billion in the first quarter ended March 31.

Corning also continues to benefit from increased investment in data centers, which is boosting demand for its fiber‑optic products.

Its ​optical communications division, ​which includes fiber-optic ⁠cables, hardware and connectors, recorded net sales of $1.85 billion in the first quarter, beating estimates of $1.7 billion.

Corning also ​said it has signed long-term agreements with two hyperscalers. ​Like the $6 ⁠billion Meta deal it announced in January, the partnerships are aimed at meeting the connectivity demands of high-capacity data centers.

The company’s core sales for the ⁠first ​quarter stood at $4.35 billion, beating estimates of $4.26 ​billion. Adjusted profit came in at 70 cents per share, compared with estimates of 69 cents. Reuters