Corning Incorporated (GLW – Free Report) is increasingly focusing on the increased production of fiber optic cables, as an increase in demand for broadband connectivity has resulted in a wide proliferation of fiber infrastructure across the world. The company has expanded its optical cable manufacturing capacity in domestic and European Union (“EU”) markets to meet growing demand.
The company is setting up a new production plant in Gilbert, AZ, which should be operational in 2024. It will allow Corning to meet the growing demand for broadband solutions in the West and in Canada. It is likely to generate approximately 250 jobs initially to boost regional economic development.
Corning is also setting up a new production facility in Mszczonów, Poland, to help meet the growing demand for high-speed connectivity in Europe through large-scale production of low-cost fiber optics. The new plant will increase Corning’s production of optical cables and connectivity components in Stryków, Poland, while strengthening its two-decade-old manufacturing operations in the country.
With this, the company has invested more than $500 million since 2020 to increase its fiber and cable manufacturing capacity in domestic and international markets. Several factors are likely to drive the company’s fiber optic solutions business over the next few years, primarily the growing use of mobile devices that require efficient data transfer and networking systems. This trend is supported by the proliferation of clouds, which translates into an increase in storage and even computation on a virtual plane.
As consumers and businesses use the network more, there is a huge demand for quality networking. As optical networks are more efficient and most existing networks are copper-based, the demand for optical solutions is strong. Corning offers several data center-focused products with a portfolio of fiber optics, hardware, cables and connectors that help it create optical solutions to meet changing customer needs.
Despite an ongoing chip shortage and inflated raw material prices, Corning expects 6-8% compound annual growth in sales and 12-15% compound annual growth in earnings per share through 2023, while investing $10-12 billion in research, development and engineering, capital, and mergers and acquisitions. It plans to increase its operating margin and return on invested capital and pay $8 billion to $10 billion to shareholders, including an annual dividend increase per share of at least 10%.
To achieve its goals, the company expects additional annual sales of $3 billion to $4 billion and improved profitability by the end of 2023. GLW is extending performance under its strategy framework and growth plan for 2020-2023 and is focused on improving its product portfolio and using financial strength to improve shareholder returns.
Other notable actions within the industry are Arista Networks, Inc. (A NET – free report), TESSCO Technologies Incorporated (TESS – free report) and Harmonic Inc. (HLIT – free report).
Arista continues to benefit from strong momentum and diversification across its core verticals and product lines. The company has a software-centric and data-centric approach to helping customers build their cloud architecture and improve their cloud experience. Arista has delivered a 10.1% earnings surprise, on average, over the past four quarters.
TESSCO offers products to the industry’s leading manufacturers in the fields of mobile communications, Wi-Fi, wireless backhaul and related products. With over three decades of experience, it provides complete end-to-end solutions to the wireless industry. TESSCO has made a surprise profit of 61.9%, on average, over the past four quarters.
Harmonic provides software, products, system solutions and video streaming services worldwide. With more than three decades of experience, it has revolutionized cable access networks with the industry’s first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit Internet service at the consumers’ homes and mobile devices. Harmonic has generated a 79.3% earnings surprise, on average, over the past four quarters.
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