Corning GLW reported first-quarter core earnings of 28 cents, matching the Zacks Consensus Estimate. The three most important segments declined significantly in the last quarter, but overall revenue was only slightly short of expectations. On a positive note, the LCD sequential price decline was the lowest in five years and will moderate further in the second quarter. Revenue Reported revenue of $2.05 billion dropped 8.2% sequentially and 9.6% year over year. Core revenue of $2.17 billion was 2.2% below the Zacks Consensus Estimate of $2.22 billion. The Display Technologies segment generated around 39% of total revenue. Segment revenue was down 8.2% sequentially and 14.7% year over year. LCD glass volume declined by a mid-single-digit percentage, as guided. Optical Communications (29% of revenue) fell 17.3% sequentially and 12.6% from the year-ago quarter. Management cited production issues related to manufacturing software implementation that impacted sales by around $100 million, profit by $40 million. The Environmental Technologies segment generated around 12% of revenue, up 3.9% sequentially and down 6.4% year over year. Specialty Materials generated 11% of revenue, down 17.5% sequentially and 16.5% year over year. The Life Sciences business accounted for around 10% of revenue. The business was up 1.0% sequentially and 3.6% from a year ago. Margins The gross margin was 40.8%, down 74 bps sequentially and 323 bps from last year. The operating expenses of $514 million were down 13.2% sequentially and 3.0% year over year. All expenses increased year over year as a percentage of sales. SG&A dropped 149 bps sequentially and increased 57 bps from last year. R&D was up 1 bp sequentially and 99 bps from March 2015. The net result was an operating margin of 17.1%, which expanded 23 bps sequentially and shrank 509 bps from the year-ago quarter. Net Income Corning’s core net earnings were $340 million, or 15.7% of sales compared to $429 million or 17.9% in the previous quarter and $484 million, or 19.9% in the year-ago quarter. Net loss on a GAAP basis was $392 million ($0.36 a share) compared to income of $200 million ($0.17) in the previous quarter and $407 million ($0.29 a share) in the March quarter of 2015. Balance Sheet and Cash Flow Inventories were up 4.9% sequentially, with inventory turns going from 3.6X to 3.2X. DSOs went from 56 to 62. Corning ended the quarter with $3.54 billion in cash and short term investments. The company has a huge debt balance. The net debt position at quarter-end was $897 million compared to a net cash balance of $118 million going into the quarter. Cash used in operations was $83 million, with the main uses of cash being $270 million on capex, $703 million on share repurchases and $173 million on dividends. Guidance Management expressed optimism about Corning’s results for the rest of the year based on strong underlying trends in the business. Accordingly, they provided the following outlook for the second quarter: Corning expects panel maker utilization to increase in the second quarter, with the overall glass market and Corning’s volume increasing by a high single-digit percentage rate sequentially. LCD glass price declines are expected to moderate further and TV units to grow 8-10% driven by consumer preference for bigger screens. All these factors are positive for the Display business. Optical Communications sales are expected to increase 20%+ sequentially due to seasonal demand and increased cable production and first quarter issues getting resolved. Second half sales are currently expected to be 10% higher year over year. Environmental sales are expected to be consistent with the year-ago quarter. Specialty Materials sales are expected to increase year over year by a low-single-digit percentage, as Gorilla Glass demand picks up. Segment sales are currently expected to grow mid-to-high single digits in 2016. The Life Sciences business will grow low-single digits from last year. Recommendation Corning shares are being offloaded rapidly this morning despite the strong guidance and are down more than 7% as of this writing. The shares carry a Zacks Rank #2 (Buy). Other bets in the technology sector are Facebook FB, Mercadolibre MELI or Stamps.com STMP, which carry a Zacks Rank 2 (Buy), and Travelport TVPT, which carries a Zacks Rank #1 (Strong Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report STAMPS.COM INC (STMP): Free Stock Analysis Report MERCADOLIBRE IN (MELI): Free Stock Analysis Report CORNING INC (GLW): Free Stock Analysis Report FACEBOOK INC-A (FB): Free Stock Analysis Report TRAVELPORT WWD (TVPT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research