Technology glass manufacturer Corning experienced a significant stock decline Tuesday after announcing revenue projections for the upcoming quarter that fell short of Wall Street expectations, despite robust performance in its data center operations.
The company’s stock price dropped more than 10% during premarket trading following the announcement on April 28.
Economic uncertainty has led consumers to hold onto their electronic devices longer and spend more cautiously, creating headwinds for Corning’s business even as its fiber-optic communications division sees strong growth.
The manufacturer projects core revenue of approximately $4.6 billion for the quarter ending June 30, which falls below the analyst consensus estimate of $4.63 billion compiled by LSEG.
As a major supplier to Apple, Corning has experienced challenges from declining global smartphone sales, which has reduced demand for its specialized glass products used in display technology.
The company’s glass innovations division, encompassing display and specialty materials, saw net revenue increase 1% to $1.42 billion during the first quarter that concluded March 31.
However, Corning continues to see strong performance from growing data center investments, which has increased demand for its fiber-optic offerings.
The optical communications business unit, covering fiber-optic cables, hardware and connection equipment, generated net revenue of $1.85 billion in the first quarter, surpassing analyst projections of $1.7 billion.
The company announced it has secured long-term contracts with two major cloud computing providers. These partnerships follow a similar pattern to the $6 billion agreement with Meta announced in January, designed to support connectivity requirements for high-capacity data centers.
First-quarter core revenue totaled $4.35 billion, exceeding analyst estimates of $4.26 billion. The company reported adjusted earnings of 70 cents per share, slightly above the 69-cent estimate.
