As part of its Q2 financial report, Corning announced that Lumen Technologies has reserved 10% of Corning’s global fiber capacity for each of the next two years to interconnect AI-enabled data centers. This will be the first outside-plant deployment of Corning’s new generative-AI fiber and cable system, which enables Lumen to fit two to four times the amount of fiber into their existing conduit.
The news led to a huge jump in Lumen's stock price on Tuesday.
Wendell P. Weeks, chairman and chief executive officer, said, “Our strong second-quarter results exceeded the guidance we provided in April and marked a return to year-over-year core sales and EPS growth. The outperformance was driven primarily by the strong adoption of our new optical connectivity products for generative AI, which drove record sales in the Enterprise portion of our Optical Communications business. The opportunity is only growing; in fact, in the third quarter, we reached an agreement with Lumen Technologies that uses our new gen-AI fiber and cable system to facilitate Lumen’s build of a new network to interconnect AI-enabled data centers.”
Second-Quarter 2024 Financial Highlights:
GAAP sales were $3.25 billion. Core sales were $3.60 billion.
GAAP EPS was $0.12, and core EPS was $0.47. The difference between GAAP and core EPS primarily reflected constant currency adjustments, translated earnings contract gains, and translation gains on Japanese-yen-denominated debt, as well as restructuring and non-cash asset write-off charges.
GAAP gross margin was 29.2%. Core gross margin improved sequentially and year over year by 110 and 170 basis points, respectively, to 37.9%.
GAAP operating cash flow was $521 million, and adjusted free cash flow was $353 million.
In Optical Communications, second-quarter sales were $1.1 billion, up 20% sequentially, marking a return to growth. Year over year, sales increased 4%, reflecting record sales in the Enterprise portion of the business, which was up 42%, driven by AI-related connectivity solutions. Second-quarter net income was $143 million, up 43% sequentially, driven by strong incremental profit on the higher volume.
Source: https://convergedigest.blogspot.com/2024/07/lumen-reserves-10-of-cornings-global.html