Corning Inc Stock Hold Recommendation Reiterated (GLW)

NEW YORK (TheStreet) -- Corning (NYSE:GLW) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

• GLW's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.46, which clearly demonstrates the ability to cover short-term cash needs.
• Net operating cash flow has increased to $762.00 million or 32.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.05%.
• Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market on the basis of return on equity, CORNING INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
• CORNING INC's earnings per share declined by 36.2% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CORNING INC reported lower earnings of $1.76 versus $2.26 in the prior year. For the next year, the market is expecting a contraction of 24.1% in earnings ($1.34 versus $1.76).

Corning Incorporated produces specialty glasses, ceramics, and related materials worldwide. The company operates in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences. The company has a P/E ratio of 8.2, equal to the average electronics industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Corning has a market cap of $19.8 billion and is part of the technology sector and electronics industry. Shares are down 3.9% year to date as of the close of trading on Thursday.

You can view the full Corning Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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