Optical fiber and components allow information to be sent across glass cables using beams of light. Fiber optics allow more data to be sent at faster speeds than traditional copper networks.
Corning and rivals such as JDS Uniphase and Nortel Networks have benefited from the surging demand for optical fiber as telephone and Internet companies race to upgrade their networks to handle increasing amounts of data, voice and video traffic.
Due to this booming demand, Corning recently raised its growth outlook for 2000. It reiterated on Monday that it expects full-year pro forma earnings per share in the range of $1.15 to $1.17, an increase of about 70 percent over last year’s earnings of 67 cents a share.
It also expects its 2001 growth to exceed Wall Street expectations.
“We believe our key growth businesses will lead the way for strong revenue and earnings growth throughout 2001. Consistent with our long-term growth objectives, we expect earnings to grow next year at a rate of about 25 percent,” said Corning Chairman Roger Ackerman.
Its pending acquisition of Pirelli SpA’s optical-components business will dampen growth by somewhat less than 5 percent, resulting in expected 2001 pro forma earnings per share in the range of $1.40 to $1.43.
Analysts currently expect Corning to earn $1.38 a share, compared with $1.17 a share in 2001, according to First Call/Thomson Financial.
Last month Corning said it would acquire a 90 percent stake in optical components maker Optical Technologies from Italian cable and tire company Pirelli SpA for $3.6 billion in an effort to expand its product mix.
The deal will give Corning gets access to new products such as speciality fibers, which manage light signals as they travel across networks, or fiber gratings, which help manipulate or redirect light wavelengths. The equipment helps glass fiber networks carry more data at faster speeds.
Separately, communications Level 3 Communications Inc. said Corning will be its worldwide supplier of optical fiber and cable for at least the next four years and will supply more than 10 million kilometers of fiber.
Under the agreement, Level 3 and Corning will cooperatively research, develop and deploy new and more cost effective generations of optical fiber.
The deal builds on the two companies existing relationship. In August, Corning agreed to supply more than 2 million kilometres of an enhanced generation optical fiber.
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SBC’s Earnings Fall
Local telephone company SBC Communications said today its third-quarter operating profits fell 0.7 percent but beat Wall Street expectations as results were driven by strong growth in wireless and data operations.
San Antonio-based SBC’s third-quarter profits, excluding one-time items, fell to $1.96 billion, or 57 cents a share, compared with $1.97 billion, or 57 cents a share, a year ago. The results beat analysts’ consensus estimate of 56 cents a share, according to research firm First Call/Thomson Financial.
Including one-time items, SBC’s profits were $3 billion, or 88 cents a share, compared with $1.1 billion, or 33 cents a share, a year ago. Revenues rose 8 percent to $13.5 billion.
SBC, which has 53 million customers from Ohio to California, said its data revenues increased 46.1 percent to $2 billion. Wireless subscriber revenues jumped 20 percent to $1.7 billion as it added 486,000 subscribers in the quarter. SBC added 117,000 digital subscriber line (DSL) subscribers, bringing the total to 516,000.