Did
Corning (NYSE: GLW) just try to spin us?
Reviewing the gigantic glassmaker's Q3 earnings report
this week, I was struck by the company's multiple references
to "sequential results":
All of which sounds good ... until you compare the numbers
to what Corning was selling, and earning, one year ago. By
that metric, Q3 saw sales slip 5%, and profits 9%. It got
this Fool to wondering -- why the focus on sequential
results, which everyone knows can vary according to seasonal
fluctuations caused by holidays (especially seeing as Corning
is
thebig player in LCD glass, and therefore affected
by supply-chain building for the Christmas sales season at
retailers like
Best Buy (NYSE: BBY),
Target (NYSE: TGT), and
Wal-Mart (NYSE: WMT).)
Wondering ... and investigating. Want to know what I
found?
Sure you do. You opened the article, right? So here it is:
Up until about Q3 last year -- when
the financial crisis
broke wide open -- Corning was in the habit of comparing
apples to apples, and year-ago results to whatever quarter we
were in at the time. This strategy shifted around Q4 2008
because of the fortuitous confluence of sequential and
year-over-year results, as sales plummeted 30% by both
measures. This helped Corning segue into emphasizing
sequential results.
What're you up to, Corning?
Now, a more conspiratorial-minded Fool might think
Corning is up to something, here. That it's playing "hide the
bad news" even as the economic crisis conspires to "hide the
profits" from Corning. But I don't think that's the case.
Rather, I think Corning's too busy peering through the
telescope, looking for an end to the recession, to be
bothered with spinning its results. And what does Corning
see?
Sales are down year over year, sure, but they're starting
to ramp back up. Profits ticked back up as well. And as I
mentioned earlier this month, things are looking
sooptimistic in the LCD TV space that panel maker
LG Display (NYSE: LPL) thinks we'll end the
year with sales up 50% -- and Corning itself predicts 20%
growth in 2010, year over year.
Foolish takeaway
I'll let others criticize Corning for changing the
"rules of the game." Me, I'm just thankful for the good news.
This recession was a nice place to visit and
shop for cheap stocks-- but I don't want to live here
forever.
This article was originally published as
Corning Accentuates the Positive, Eliminates the
Profitson
Fool.com
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