Corning Incorporated (GLW) saw its shares tumble more than 10% in premarket trading on Tuesday after the company's second-quarter revenue forecast disappointed Wall Street. Despite reporting better-than-expected first-quarter results, investors focused on the softer outlook for the current quarter, which fell short of analyst estimates by a narrow but critical margin.
The company posted first-quarter adjusted earnings of $0.70 per share, edging past the consensus estimate of $0.69 by a penny. Core sales reached $4.35 billion, up 18% year over year and ahead of the expected $4.26 billion. However, the positive surprise was overshadowed by the second-quarter guidance. Corning projected Q2 core sales of approximately $4.6 billion, below the Wall Street range of $4.63 billion to $4.65 billion. The guidance for adjusted earnings, expected between $0.73 and $0.77 per share, was broadly in line with analyst projections.
The stock had surged as much as 92% year-to-date before Tuesday's selloff, reflecting high investor enthusiasm for AI-related infrastructure plays. The pullback also occurred amid broader tech market weakness, following reports that OpenAI missed its own revenue and growth targets.
Optical Communications Segment Powers Through
Corning's optical communications division remained the primary growth engine, reporting net sales of $1.85 billion in Q1, a 36% increase from a year earlier and well above estimates of $1.7 billion. The company also announced it has finalized two new long-term agreements with hyperscalers, described as "similar in size and duration" to the previously disclosed $6 billion deal with Meta Platforms. The customers were not named.
The fiber and cabling business has become Corning's largest segment and a key beneficiary of data center buildout linked to AI infrastructure. In addition, the company highlighted gains in its newer solar business, where sales rose sharply during the quarter, contributing to overall revenue expansion.
Consumer Electronics Weakness Offsets Gains
While AI-driven demand remains robust, Corning continues to face headwinds from its traditional consumer electronics end markets. The glass innovations segment, which includes display technologies and specialty materials, grew just 1% in Q1 to $1.42 billion. Slower smartphone replacement cycles and cautious consumer spending have weighed on demand for Corning's specialty glass products, including those supplied to Apple.
This weakness in consumer-facing segments has partially offset the strong performance in optical communications, contributing to the more muted revenue outlook for the second quarter.
Broader Market Pressure on AI Stocks
Tuesday's selloff extended to other optical networking stocks. Ciena dropped 4.8%, Coherent fell 5.6%, and Lumentum was also down 5.6% in premarket trading. The decline came amid a cautious turn in sentiment toward AI-linked stocks, exacerbated by reports that OpenAI missed its revenue targets. Despite these near-term headwinds, Corning's long-term growth outlook remains tied to continued investments in data centers and connectivity infrastructure.
