Corning’s optical communications revenues jump 11% on North American FTTH sales

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Manufacturing performance played a key role in Corning's higher 2016 profits.

Corning continues to reap the benefits of North American service providers building out FTTH networks: its optical communications unit sales rose 11% in the fourth quarter.

In tandem with FTTH solutions sales, Corning said an improvement in manufacturing performance contributed to the higher year-over-year profitability.

Tony Tripeny, SVP and CFO of Corning, told investors during the fourth-quarter earnings call that the increase in optical communications profits was due to higher product sales from service providers.

“The increased sales of our solution products and improved manufacturing performance contributed to the higher year-over-year sales and profitability,” Tripeny said. “North America carrier network business provided the fourth-quarter growth highlight as demand for our FTTH solutions remains strong.”

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Within the optical communications segment, carrier sales rose 12% to $619 million, while enterprise revenues were up 8% to $200 million. 

Tripeny said Corning expects 2017 optical communications growth to be driven by three main factors: fiber market demand exceeding supply, industry leaders investing in optical solutions, and the consolidation of some of its largest service provider customers.

The fiber manufacturer is forecasting first quarter optical communications sales growth to be at least 25% year-over-year. For the full-year 2017, Corning expects sales to be up year-over-year in the low-teens range.

“The increase will largely be the result of a continuation of the growth trends we saw in the second half of 2016,” Tripeny said.

Corning said it will invest $10 billion from 2016 to 2019. In 2017, Corning will spend $1.5 billion in capital to expand in four segments: optical, mobile and consumer electronics, glass manufacturing, and automotive.

Tripeny said one area of this capital investment will support the “double digit growth of optical communications.”

Full-year 2016 optical communications sales were $3 billion, and core earnings were $297 million.

Overall fourth-quarter revenues were $2.48 billion, down sequentially, but up 11% year-over-year from $2.23 billion in the same period a year ago.