Salomon Cuts Corning Rating
Salomon Smith Barney downgraded its rating on shares of Corning Inc. (GLW ) to outperform from buy.
The supplier of telecommunications and other specialized glass products posted $0.34 vs. $0.18 Q4 EPS (pro forma) on a 52% sales rise. Analyst Timothy Anderson says optical component inventory drawdowns at Nortel (NT ) and Lucent (LU ), as well as continuing uncertainty about carrier spending, is likely to put a perceptual overhang on shares, limiting Corning's near-term upside.
Anderson says Corning's Q4 looks solid, with a rough $0.03 EPS that is above consensus, after adjustments. He notes Corning's lowered guidance for Q1 by $100 million-$200 million on the top line and its widened EPS range to $0.28-$0.31 from $0.29-$0.30. The firm cites concerns of lower than expected photonic and fiber order rates in the first half of 2001. Corning maintained its stock-price estimate, but cut its $95 target to $90.