Corning Q3 Core EPS Rises 36% on AI Fiber Boom but Stock Slips After CapEx Concerns Emerge

Corning Incorporated posted its strongest quarterly sales growth since launching its Springboard plan, driven by explosive demand for fiber-optic materials tied to artificial intelligence infrastructure buildouts. Third-quarter core sales rose 19% year over year to $5.08 billion, beating the $5.02 billion analyst consensus, while core EPS climbed 36% year over year to $0.91, topping the $0.88 estimate. GAAP net income came to $680 million, or $0.78 per diluted share, up 56% from a year earlier.

Optical Communications was the engine of growth, with segment revenue surging 44% year over year to $2.38 billion as hyperscalers and carriers raced to lay fiber for AI data centers. Solar revenue jumped 37% to $436 million and Automotive added 4% to $470 million, though Glass Innovations slipped 3% to $1.5 billion. Core gross margin expanded 150 basis points to 40.5% and core operating margin widened 310 basis points to 22.7%, reflecting operating leverage across the business. Operating cash flow reached $1.1 billion and adjusted free cash flow was $661 million.

Corning secured four long-term, multibillion-dollar customer agreements during the quarter, including deals with Verizon and AT&T, and said its generation AI product sales doubled year over year, outpacing GPU unit growth. Chairman and CEO Wendell Weeks said he is "quite bullish on AI demand over the long term" and the company is targeting an annualized sales run rate of $40 billion by 2030, with Solar alone progressing toward a $3 billion annual run rate. A long-term partnership with Nvidia is aimed at expanding U.S. optical connectivity manufacturing capacity tenfold while increasing domestic fiber production by more than 50%.

For the fourth quarter, Corning guided core revenue of $5.2 billion to $5.3 billion and adjusted EPS of $0.96 to $1.00, the midpoint of which exceeds the $0.94 Wall Street estimate. Despite the beats, the stock reversed its roughly 3% premarket gain to trade down about 2% after the earnings call, with investors citing capital expenditure concerns flagged during the call.