Earnings Preview | Optical Communications Taking the Lead + CECEP Solar Energy Awaiting Recovery: Is Now the Right Time to Position in Corning Inc (GLW.US) Ahead of Earnings?

Corning Inc (GLW.US) will release its third-quarter 2026 earnings report before the market opens on October 27. The Zacks consensus market estimate is for sales of US$5 billion and earnings per share of 88 cents. Over the past 60 days, the market's expectation for Corning Inc's full-year 2026 earnings per share has been raised 0.61% to US$3.29, and its expectation for 2027 earnings per share has been raised 0.47% to US$4.30. The advanced glass substrate manufacturer has delivered strong earnings over the past four quarters, beating market expectations by an average of 1.75%. The Zacks proprietary model predicts that Corning Inc's third-quarter earnings are likely to exceed expectations. Q3 earnings highlights: Optical communications taking the lead, CECEP Solar Energy awaiting recovery Optical communications is expected to remain the key DRIVE for Corning Inc's Q3 performance. Continued growth in AI infrastructure and hyperscale data center investment is driving up demand for optical fiber, Optical Cable Corporation, and high-density connectivity solutions. Corning Inc's multi-year agreements with Amazon.com, Inc. and NVIDIA Corporation, as well as its previously announced collaboration with Meta, further support demand; the agreement reached with Verizon in September to supply high-density optical fiber and connectivity solutions through 2032 also strengthens its long-term growth prospects. In addition, Corning Inc plans to expand U.S. manufacturing capacity and invest in next-generation optical technology, which will further solidify its long-term competitiveness. The CECEP Solar Energy business is in a recovery period. In the second quarter, extended maintenance shutdowns and equipment upgrades at wafer plants weighed on earnings performance. Management expects sales and profit to improve in the third quarter as production recovers and operational efficiency improves. Corning Inc is expanding its U.S. polysilicon, wafer, and module production capacity, and improved production efficiency is expected to drive an improvement in the profitability of the CECEP Solar Energy business, becoming an additional source of growth. In the medium to long term, focus on the implementation of the Springboard plan. Under the upgraded "Springboard" plan, management aims to achieve annualized sales of US$20 billion by the end of 2026, US$30 billion by the end of 2028, and US$40 billion by the end of 2030. However, these targets depend on whether execution can be delivered and whether customer demand can be sustained. The risk lies in uneven business performance. Demand trends in the consumer electronics and automotive markets, as well as the impact of rising memory chip prices on smartphones, may weigh on growth in some of Corning Inc's businesses. Ahead of the earnings release, is Corning Inc worth positioning in? Over the past year, Corning Inc's stock price has risen 41.8%, while the industry average gain was 100.8%. From a valuation perspective, Corning Inc's forward P/E ratio is 30.24x, below the industry average of 31.13x, but above the stock's own historical average of 26.57x. In summary, AI-driven optical connectivity demand, long-term customer agreements, and improving operating margins are the main positive factors for Corning Inc's third-quarter earnings report. Improved profitability in the CECEP Solar Energy business is expected to further boost performance. The continued improvement in earnings and cash flow over the past several quarters also constitutes a tailwind. In Zacks' view, buying Corning Inc stock ahead of the earnings release appears to be a good investment choice.