Is Corning Durable?

January 08, 2013

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio and balance sheet for Corning are strong.

	Debt-To-Equity	Cash	Long-Term Debt
GLW	0.16	$6.35 Billion	$3.40 Billion
TEL	0.47	$1.59 Billion	$3.71 Billion
MOLX	0.90	$702.08 Million	$225.07 Million

T = Technicals on the Stock Chart Are Mixed

Corning hasn’t performed well over the past few years, and it has been outperformed by TE Connectivity (NYSE:TEL) and Molex Incorporated (NASDAQ:MOLX). However, if odds were being drawn up for the next three years, Corning would be the favorite.

	1 Month	Year-To-Date	1 Year	3 Year
GLW	0.80%	0.16%	-4.03%	-32.05%
TEL	3.59%	0.16%	16.92%	57.88%
MOLX	4.89%	3.62%	17.99%	42.00%

At $12.63, Corning is currently trading above its 50-day and 100-day SMA, and slightly below its 200-day SMA.

50-Day SMA	12.13
100-Day SMA	12.36
200-Day SMA	12.67

E = Earnings Have Been Inconsistent

2010 was a good year for Corning, and it looked as though business would continue to improve. However, 2011 was a disappointment. While everyone was down on the company at that time, revenue still grew at a solid pace. As long as there is revenue growth, there is potential for EPS growth. The point here is that 2011 shouldn’t be looked at as a complete failure. If anything, it might have been a necessary setup for the future.

	2007	2008	2009	2010	2011
Revenue ($)in billions	5.86	5.95	5.40	6.63	7.89
Diluted EPS ($)	1.34	3.32	1.28	2.25	1.77

When we look at last quarter on a YoY basis, we see a decrease in revenue and earnings. However, this shouldn’t be cause for concern.

	9/2011	12/2012	3/2012	6/2012	9/2012
Revenue ($)in billions	2.08	1.89	1.92	1.91	2.04
Diluted EPS ($)	0.51	0.32	0.30	0.30	0.35

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