Ten years ago, Apple decided to use Corning Incorporated (NYSE: GLW) Gorilla Glbad for the original iPhone. Since its first use on the iPhone, Corning scientists continued working on the material and released new versions of the glbad once every two years. Each generation of Gorilla Glbad was more resistant and flexible than the previous generation, being able to resist higher falls and more scratches.
Incredibly, the resistant, lightweight and scratch-resistant material has since been used to cover more than five billion devices from 40 different manufacturers.
Now in its fifth generation (GG5), special glbad is beginning to show a material impact on the upper and lower Corning lines. The company's main sales in the third quarter increased to $ 2.7 billion, a year-on-year increase of 6%, which translates into a slight increase in basic earnings per share, to $ 0.43. The specialized materials division of Corning, the division responsible for Gorilla Glbad, experienced much stronger growth and helped boost the company's overall results. Net sales in specialized materials grew 26% more robust to $ 373 million, while the division's profits increased 61% even more, to $ 71 million.
This is only a small part of Corning's overall business, but its rapid growth, high margins and future possibilities make it increasingly important to the company's prospects.
Corning's Gorilla Glbad has been used on 5 billion devices by 40 different manufacturers. Image Source: Corning Inc.
Rapid Adoption of Gorilla Glbad 5
The CEO of Corning Wendell Weeks firmly believes that the success of GG5 can be directly attributed to his performance ratings compared to competing products . During the company's teleconference in the third quarter, according to S & P Global Market Intelligence, he stated:
Our mobile consumer electronics platform … reached an important milestone this year: the tenth anniversary of Corning Gorilla Glbad. During the decade, we innovated to make Gorilla thinner, more resistant and more resistant to damage than ever, with Gorilla Glbad 5 showing dramatically improved drop performance compared to alternatives. We have developed specialized processes to reduce glare, improve aesthetics and improve scratch resistance. Today, Gorilla Glbad is seeing wider adoption than ever. In recent months, the leading smartphone manufacturers adopted our glbad in their new devices. Advanced glbad offers several benefits over other materials such as metal or plastic. Along with improved wireless charging, the advanced glbad on the back also allows for better reception. Allows new levels of design and customization.
The superior performance of the product has led to its adoption among the leading manufacturers of consumer electronics. It is important to note that this was not a quarter-size increase in Gorilla Glbad sales; A popular brand of smart phones does not just enter and make a large order. In the first nine months of 2017, sales increased 28% more than in the first nine months of 2016, and management does not see growth slowing in the short term. Weeks said the company expects its sales in mobile consumer electronics to double "in the coming years." Perhaps best of all, the margins of the segment are above the company average, which means that as Gorilla Glbad sales grow, so will Corning's margins.
Many low bananas are left in the tree for this Gorilla
While Gorilla Glbad 5 sales have exploded as it is being used by virtually every major smartphone manufacturer, Corning is also selling Gorilla Glbad for other uses. During the conference call, Weeks recited a long list of wearables using now Gorilla Glbad SR +, a version specifically developed for wearables. Notable victories in product design include Leap Ware from Acer Inc. and Wal-Mart Stores & # 39; Blackweb screensavers.
Perhaps even more exciting is the possible future image of Gorilla Glbad in automobiles. Weeks announced that Corning was progressing on this front in 25 different automotive platforms: "On the outside of automobiles, Gorilla Glbad laminates are lighter and stronger than conventional automatic glbad, in addition to their superior optical quality that allows larger main screens and clear. Gorilla Glbad makes cars more connected and durable with the sophisticated capabilities expected from their smartphones. "
Corning has many opportunities for future growth. It is the world's lowest-cost fiber optic producer, which gives it a large pit in a rapidly growing sector. Corning's new Value Glbad, created specifically to contain expensive drugs for the pharmaceutical industry, could eventually generate $ 4 billion in additional revenue for the company. But Gorilla Glbad, with all its potential uses in the explosive category of consumer electronics and the automotive industry, could represent the best source of growth for the company in the coming years. Corning has already risen more than 31% so far this year, crushing market performance of 18% during the same time. But with the company expecting Gorilla Glbad sales to double in the coming years, investors can probably expect these market returns to continue in the coming years.
Matthew Cochrane owns stock, and The Motley Fool recommends, Corning. The Motley Fool owns shares and recommends AAPL. The Motley Fool has the following options: long January 2020 calls of $ 150 in AAPL and short of January 2020 calls of $ 155 in AAPL. The Motley Fool has a disclosure policy.