Editor's Note: 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.
NEW YORK (
) 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, expanding profit margins and good cash flow from operations. 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.
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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 3.97, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CORNING INC is rather high; currently it is at 54.30%. Regardless of GLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLW's net profit margin of 24.20% significantly outperformed against the industry.
- Net operating cash flow has slightly increased to $570.00 million or 4.39% when compared to the same quarter last year. Despite an increase in cash flow, CORNING INC's cash flow growth rate is still lower than the industry average growth rate of 23.74%.
- 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 28.4% in earnings ($1.26 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. Corning has a market cap of $20.13 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 9.5, below the S&P 500 P/E ratio of 17.7. Shares are up 4.2% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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