Corning’s sturdy quarter was buoyed by explosive development in its enterprise optical enterprise and rising demand for gen AI options
Corning Included delivered better-than-expected Q1 2025 outcomes this week, buoyed by explosive development in its enterprise optical enterprise and rising demand for connectivity options tailor-made to the generative AI (gen AI) growth. The corporate posted core gross sales of $3.68 billion, exceeding Wall Avenue estimates of $3.64 billion, and an adjusted earnings per share (EPS) of 54 cents, forward of the 51-cent consensus.
Corning’s outlook for the second quarter is equally bullish, with core gross sales projected to rise to round $3.85 billion and EPS within the vary of 55 to 59 cents. Analysts polled by LSEG had anticipated $3.82 billion and 56 cents, respectively.
The corporate attributes its momentum to its central position in enabling information heart infrastructure and the AI ecosystem. Optical communications merchandise, particularly these utilized in generative AI (GenAI) information facilities, have pushed a notable portion of this development.
CEO Wendell Weeks expressed sturdy confidence within the firm’s long-term trajectory, stating: “That’s one of many causes that as we speak we reiterate our high-confidence plan so as to add greater than $4 billion to our annualized gross sales run fee by the tip of 2026. We be ok with our improvements within the secular traits driving our development.”
Weeks pointed to constant demand throughout a number of verticals as proof of those traits’ sturdiness. “We proceed to see and listen to reconfirming proof that our secular traits are intact and stay related. We see it in our outcomes, and we see it in our order books, and we hear it in our detailed dialogues with our prospects,” he stated. “In optical communications, we’re seeing outstanding buyer response to… our product’s use inside GenAI information facilities, in addition to our improvements to interconnect AI information facilities throughout the nation.”
Enterprise gross sales, which seize demand from inside the info heart, surged 106% year-over-year in Q1. Weeks stated this development displays fast adoption of merchandise unveiled at Corning’s March investor occasion. “These merchandise are driving constructive buyer response and fast adoption. In our enterprise enterprise… adoption of our merchandise drove a report $2 billion in gross sales final yr.”
Following the investor occasion, Corning elevated its anticipated compound annual development fee for enterprise gross sales from 25% to 30%. Weeks emphasised that the corporate not too long ago accomplished critiques with main hyperscale cloud suppliers, which “reconfirmed our development expectations.”
He added, “As you’ve additionally seen in latest public bulletins from the highest hyperscalers, they’ve reaffirmed their capital plans, they usually anticipate to proceed to spend [a] important quantity of capital on this area.”
Corning is accelerating manufacturing in response to this continued demand. “We proceed to discipline sturdy constructive buyer response to our improvements and consequently we’re accelerating our ramp plans within the second quarter to fulfill rising demand,” Weeks stated.
Past enterprise, Corning sees indicators of a restoration in its service phase. Weeks famous that telecom suppliers are renewing fiber build-outs now that pandemic-era stock has been cleared. “We consider they’ve accomplished drawing down stock they constructed through the pandemic and the circumstances are actually in place for our service enterprise to spring again to development later this yr. We noticed the start of that within the first quarter.”
Corning can be gaining traction in photo voltaic and infrastructure. “In March, we stated we anticipate our new market entry platform to develop from $1 billion enterprise in 2024 to a $2.5 billion enterprise by 2028,” Weeks stated, citing demand pushed by power independence targets and favorable authorities insurance policies.
The corporate’s gen AI fiber techniques, now totally commercialized, are additionally turning into revenue-generating merchandise. One such partnership with Lumen Applied sciences — introduced in August 2024 — permits prospects to suit two to 4 instances the quantity of fiber in current conduits. “This innovation is now turning right into a income stream to make a constructive distinction in our financials this yr,” Weeks stated, noting that Corning’s manufacturing of this fiber tripled month-to-month all through Q1.
On the inescapable matter of tariffs, Weeks commented: “Backside-line, the direct impression of at the moment enacted tariffs will not be important for Corning.” He cited the corporate’s “long-standing philosophy” to find manufacturing near prospects, which insulates it from world commerce tensions. Moreover, solely 5% of its China gross sales are imported from the U.S., and subsequently topic to China’s tariff constructions.
Earlier this yr, Corning divested its distributed antenna system (DAS) and small cell enterprise to Airspan Networks, marking a strategic step away from wi-fi. The transaction included the corporate’s 6000 and 6200 DAS and SpiderCloud 4G/5G small cells.
With broad-based momentum throughout AI, telecom and clear power sectors, Corning is positioning itself as a vital enabler of next-generation infrastructure.
