Corning’s Optical Business Revenues Rise 7% on Strong Carrier, Enterprise Sales

Fiber manufacturer expects segment to grow in 2021 as customers increase optical network investments.

  • Corning

Corning reported that fourth-quarter Optical Communications sales were up as more of its service provider and enterprise customers ramped up spending to upgrade their networks to deal with new traffic patterns.

During the quarter, Corning’s fourth-quarter Optical Communications segment sales were $976 million, up 7 percent sequentially and 8 percent year-over-year.

Fourth-quarter net income was $141 million, up 23 percent sequentially and 127 percent year over year, driven by increased volume and favorable cost performance.

Wendell Weeks, CEO of Corning, told investors during the earnings call that the company does not see the division slowing down anytime soon.

“In Optical Communications, we returned to growth and we expect this growth to continue as customers increase spending to support growing bandwidth requirements,” he said.

New Bandwidth Opportunities

As it plots future growth opportunities, Corning’s Optical Communications division introduced a series of new products for 5G deployments.

Specifically, Corning is developing solutions targeting in-building wireless solutions and small cells.  

By collaborating with Verizon, Corning is enabling 5G mmWave indoor deployments for enterprise customers. Additionally, Corning is working with Qualcomm Technologies to deliver indoor networks that are 5G-ready.

Additionally, Corning is working with EnerSys to simplify the delivery of fiber and electrical power to small-cell wireless sites.

In 2020, Corning introduced its Evolv 5G-ready connectivity solutions featuring compact, easy-to-install terminals that connect the fiber network to neighborhoods and businesses.

Corning said these solutions can help “operators can save up to $500 at each terminal site by lowering installation costs and speeding deployment.”

Fiber Growth Expectations

While it did not point to any specific customer, Corning said it expects Optical Networking growth to grow.

Tony Tripeny, CFO of Corning, said the improvement in fourth-quarter sales “was driven by the incremental volume, and favorable cost performance.”

“We have returned to growth in Optical Communications, and we expect that growth to continue,” he said. “Bandwidth demand is increasing, and users are demanding higher performance connections. We're seeing positive statements from customers on increasing investments in their optical networks. Our sales and order rates are picking up, and we're ready to capture demand as it materializes.

The company is basing its growth thesis as a reflection of large carrier customers and enterprise customer statements about network expansion plans.

We're seeing both growth in the carrier and in the enterprise business,” Tripeny said. “Of course, the enterprise piece is being by driven by growth in cloud computing and hyperscale data centers. Some of the traditional enterprise pieces are more impacted by the economy. You're not seeing that as much. But we're really seeing growth in both parts of those businesses.”

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