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Corning's New Facility Boosts Potential to Tap Auto Market

Zacks Equity Research logoZacks Equity Research 7/10/2019 Zacks Equity Research

Corning Incorporated GLW has recently unveiled its new Automotive Glass Solutions manufacturing facility in the Hefei Xinzhan Hi-Tech Industrial Development Zone in Anhui province, China. The noble move reiterates the specialty glass maker’s commitment to the Chinese auto market and marks its third investment in Hefei within the past four years.

In July 2018, Corning announced plans to invest in an existing production hub in the aforementioned location in order to expand its Automotive Glass Solutions business with support from the local government.

This apart, Corning Environmental Technologies recently unveiled a new emissions control facility focused on its gasoline particulate filter product line. Last year, Corning Display Technologies opened the world’s first Gen 10.5 LCD glass substrate facility to supply BOE — China’s leading panel maker.

Markedly, the company’s new high-volume manufacturing facility will help deliver AutoGrade Gorilla Glass parts for Automotive Interiors straight to automakers worldwide. It brings more capacity for the growth of Corning’s automotive glass solutions business. In addition, it supports the company’s goal to double sales in the automotive market as specified in Corning’s 2020-2023 Strategy and Growth Framework.

The facility enables the company to deliver technical glass solutions that address and accelerate the adoption of more dynamic and visually appealing in-vehicle infotainment systems. Corning’s cover-glass innovation offers superior performance compared to commodity materials, driving significant pull for the products.

Corning continues to be a leader in the display, mobile consumer electronics and automotive markets, which better positions it to deliver advanced technical glass solutions and an extensive partner ecosystem to its auto glass customers. Management believes this facility to be crucial to meet automotive interior trend demands and double market sales by 2023.

The company has more than 40 years of OEM market presence in the automotive industry with its cellular ceramic substrates that take harmful emissions out of vehicle exhaust systems. It will begin fulfilling customer orders from this facility in third-quarter 2019.

Corning has long-term earnings growth expectation of 10.9%. Driven by diligent execution of operational strategies, the stock has rallied 16.9% compared with the industry’s rise of 11.5% in the past year.

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Corning currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Harmonic Inc. HLIT, Airgain, Inc. AIRG and EXFO Inc. EXFO. While Harmonic sports a Zacks Rank #1 (Strong Buy), Airgain and EXFO carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Harmonic has long-term earnings growth expectation of 8.8%.

Airgain surpassed earnings estimate in each of the trailing four quarters, the average positive surprise being 119.4%.

EXFO surpassed earnings estimate twice in the trailing four quarters, the average positive surprise being 9.4%.

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