Jim Cramer Says to Wait For Corning (GLW) to Fall Further

During the September 14 episode of Mad Money, a caller asked whether it is a good time to trim profits on Corning Incorporated (NYSE: GLW ) or hold the current position. Jim Cramer commented:

I don't want you to do that. Remember, in the club, I said sell it? Then I was despondent because it went up and now of course, it's going down below where, look, it was down $22 today. They're doing this at the market sell program. I don't like those programs. So, they're selling stock on the market every day. I'm going to have to say, wait till it goes down more. The business is good. I don't like that sell program. I don't know why they needed to do that.

Corning's Optical Business Remains Strong

Corning Incorporated (NYSE:GLW) disclosed on September 11 that it had entered an agreement with Goldman Sachs to sell up to $2 billion of common stock through an at-the-market offering. The company said the timing, price and amount of sales can vary based on market conditions and other factors, with proceeds intended for general corporate purposes. Corning's prospectus assumes that raising the full $2 billion at $165.96 per share would require the issuance of 12,051,097 shares, increasing shares outstanding from 861,388,331 to 873,439,428. The actual number of shares issued will depend on the sales prices under the offering.

The offering came as demand in Corning's optical business remained strong. At a September 9 Citi conference, CFO Ed Schlesinger said optical demand was "very strong" and that "orders continue to pick up." He also said Corning had "really good" visibility into demand for the next several years. The company's second-quarter results support that commentary. Optical Communications sales rose 32% year over year to $2.07 billion, while core sales increased 17% to $4.74 billion.

The bearish case is that Corning Incorporated's (NYSE:GLW) longer-term growth targets depend partly on the adoption of newer optical technologies and the company's ability to scale those businesses. At the September 9 conference, Schlesinger said adoption of scale-up photonics, including co-packaged optics, was a key variable in the company's longer-term outlook. The company is targeting a $10 billion scale-up photonics business by the end of the decade, tied largely to the adoption of NPO and CPO technologies. Schlesinger said the CPO supply chain does not yet exist at the required scale and that "a lot of work" remains to reach that run rate.

Corning also expects full-year 2026 capital expenditures of approximately $2 billion, according to its second-quarter 10-Q, compared with $754 million spent during the first half of the year. The company is pursuing its growth targets while increasing capital spending and retaining the option to issue additional shares under the new $2 billion program.