Key facts
- Corning shares fell over 16% after issuing a weaker-than-expected Q3 sales forecast.
- Cognizant also forecast Q3 revenue below estimates due to cautious client IT spending.
- Corning's Q2 revenue of $4.74 billion beat analyst expectations.
- Corning's Optical Communications segment sales grew 32% to $2.07 billion.
- Corning announced new partnerships with Amazon and Nvidia for AI infrastructure.
- Cognizant expects Q3 revenue between $5.60 billion and $5.68 billion.
Corning shares tumbled more than 16% in premarket trading after the company issued a third-quarter sales forecast that fell slightly short of Wall Street expectations, influenced by slower growth in its key fiber optics unit. This comes as Cognizant Technology also forecast quarterly revenue below estimates, citing cautious client spending on discretionary IT projects and a prioritization of data center infrastructure over software amid AI acceleration.
Despite the overall outlook, Corning noted that demand for products used in generative AI infrastructure continues to accelerate, helping to offset more muted growth in other business areas. The company's Optical Communications segment reported a 32% rise in sales to $2.07 billion, though this growth rate was lower than in previous periods. The Solar segment saw its sales nearly double to $438 million, but it incurred a quarterly loss due to maintenance and equipment upgrades, with profitability expected to improve in the third quarter.
Corning, a significant supplier to Apple, has faced headwinds from softer global smartphone demand impacting its specialty glass products. The company reported second-quarter revenue of $4.74 billion, exceeding analysts' estimates of $4.61 billion. In its efforts to bolster AI infrastructure, Corning expanded its partnerships with Amazon and Nvidia during the quarter. For the third quarter, Corning projected core sales between $4.9 billion and $5.0 billion, with adjusted earnings per share expected to be between 85 and 89 cents.
Cognizant expects third-quarter revenue between $5.60 billion and $5.68 billion, below analysts' average estimate of $5.70 billion. The company now expects annual revenue between $22.04 billion and $22.35 billion, compared with its prior expectations of $22.11 billion to $22.64 billion. For the second quarter, Cognizant reported revenue of $5.48 billion, in line with estimates and up 4.5% from a year earlier.