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Corning anticipates more 5G-fueled fiber growth ahead

Corning continues to make glass and turn it into cash – whether it's vaccine vials, TV and iPhone screens, or the fiber that takes 5G traffic to and from cell towers.

And lately the company has been bringing dividends to its shareholders. On Tuesday, Corning reported earnings of $0.45 a share on revenues of $3.29 billion during its first quarter of 2021; both numbers that were better than analysts' expectations. The company forecasted numbers that were also above analysts' best guesses – it said it expects to report earnings per share of between $0.49 and $0.53 on revenues of between $3.3 billion and $3.5 billion for the upcoming quarter.

Corning's optical communications group, which competes most closely with CommScope and Prysmian Group, posted an 18% increase in first-quarter sales ($937 million). "Sales increased in both enterprise and carrier networks, driven by the accelerated pace of data center builds, network capacity expansion, and fiber-to-the-home projects," the company said.

The entire company was on a roll. "All segments grew sales and net income by double-digit percentages year over year," the company said in its release.

"Broadly, network operators are making encouraging announcements on capital investment for 5G and hyperscale data center deployments," said Corning CEO Wendell Weeks, during a call with analysts.

A little later in the call, Weeks elaborated that 5G really is creating a demand for fiber that wasn't as pronounced during previous wireless network evolutions. He described 4G and 3G systems as "relatively fiber-poor."

"But with 5G," Weeks said, "those cells need to be so much closer to the consumer, to their customers. You need more densification, and that's driving a lot more glass into the wireless network."

Working in concert with that demand is the convergence of previously separate wireline and wireless networks, as well as previously separate consumer and business networks. "And now they're realizing that their very best returns were by putting in fixed glass networks and then being able to serve as many different offerings off the tip of that fiber," Weeks said.

The company's close ties with carrier customers should continue to be a benefit as the 5G networks roll out, if fiber buildouts aren't slowed down for any number of other reasons.

As a customer, Corning is working with Verizon and AWS to bring edge computing and private networks to its big fiber manufacturing facility in Hickory, North Carolina, where it is experimenting with computer vision and various types of automation to speed things up. As a supplier, Corning is working with Verizon, AT&T and other carriers to link up 5G mmWave nodes for indoor deployments at retail establishments, venues and other businesses.

Phil Harvey, Editor-in-Chief, Light Reading

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