Corning Inc. (NYSE:GLW), a supplier of specialty glass for Apple Inc.’s iPhone and Apple Watch, stock fell sharply Tuesday despite reporting better-than-expected second-quarter 2026 results, as investors focused on revenue guidance that largely matched Wall Street expectations after a year of AI-driven gains.
Corning Delivered Strong Growth
Adjusted earnings rose 30% year over year to 78 cents per share, topping analysts’ estimates of 76 cents. Revenue increased 17% to $4.74 billion, ahead of the consensus estimate of $4.61 billion.
Core gross margin expanded 120 basis points to 39.6%, while core operating margin improved 190 basis points to 20.9%.
The company generated $1.72 billion in GAAP operating cash flow and $1.42 billion in adjusted free cash flow during the quarter.
Segment Performance
Optical Communications revenue climbed 32% to $2.07 billion, driven by a 65% increase in Enterprise Networks, with GenAI-related products growing even faster.
Solar revenue surged 90% to $438 million. Corning said profitability in the segment is expected to improve in the third quarter following facility upgrades and maintenance work.
Glass Innovations revenue rose 1% to $1.46 billion, while Automotive sales increased 2% to $471 million.
AI Partnerships Expand
During the quarter, Corning signed a multiyear agreement with Amazon.com Inc. to supply optical fiber, cable and connectivity solutions for U.S. data center expansion.
The company also expanded its partnership with NVIDIA Corporation (NASDAQ:NVDA), aiming to increase U.S. optical connectivity manufacturing capacity tenfold and boost fiber production capacity by more than 50% to support growing AI infrastructure demand.
Corning Outlook
For the third quarter, Corning expects adjusted earnings of 85 cents to 89 cents per share, compared with analysts’ estimate of 85 cents.
The company forecast revenue of $4.9 billion to $5.0 billion, representing about 16% year-over-year growth and broadly in line with the consensus estimate of $4.97 billion.
Management expects the Solar business to become a larger earnings contributor beginning in the third quarter as production ramps up. The segment is targeting more than $3 billion in annual revenue with strong profitability and cash generation.
Corning also projected a 19% sales compound annual growth rate from the fourth quarter of 2026 through the fourth quarter of 2030.
The company said it continues to make progress under its upgraded Springboard Plan and expects annualized sales of $20 billion by the end of 2026, $30 billion by 2028 and $40 billion by 2030.
Corning Stock Reaction
Corning shares were down 19.89% at $114.85 at the time of publication on Tuesday, according to Benzinga Pro data.
The stock’s sharp decline reflects elevated investor expectations after Corning shares more than doubled over the past year on optimism surrounding artificial intelligence infrastructure spending and high-profile partnerships.
While the company delivered a strong quarter, its forecast for roughly 16% third-quarter core sales growth largely matched Wall Street expectations, offering little upside surprise.
The cautious reaction also weighed on other optical networking and photonics stocks, with shares of Ciena Corp. (NYSE:CIEN), Coherent Corp. (NYSE:COHR) and Lumentum Holdings Inc. (NASDAQ:LITE) moving lower in sympathy.
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