Corning reported 4Q17 revenue of $2.74b versus Street of $2.65b, a 3.4% topline beat. Corning is guiding 2018 revenue to ~$11b versus Street of ~10.6b, also a 3% beat. Non-GAAP EPS of $0.49 was also ahead of Street at $0.47.
We liked:
- Display in-line on revenue but commentary is bullish on outlook
- Optical crushed with $928m in revenue, 4% above Street expectations, and a critical part of the driver of the equity
- Other segments were also ahead, notably Environmental 5% above Street
Disliked:
- OCF was above Street at $888m (Street $749m) but the company is keeping the pedal down on capex at $557m versus Street at $399m, which means FCF-based valuation is going to look even more stretched
If we have to choose between revenue growth and FCF we will almost always pick the former. In this case the net is bullish. We will wait for color on 1Q18 guidance on the call and be back with more.
