Corning Inc. (GLW) , one of the larger somewhat under-the-radar names (just 11 analysts follow it), put up better-than-expected fourth-quarter earnings Tuesday and the stock jumped 11% as a result. It was the 11th consecutive quarterly earnings surprise for Corning dating back to the third quarter of 2016.
Revenue of $3.08 billion was up 15% from the same quarter last year and was $70 million ahead of consensus estimates, while earnings of 59 cents a share were 2 cents ahead of estimates. In any event, the market liked what it saw.
Meanwhile, Corning has continued to do what attracted me to shares in the first place -- returning capital to the shareholders via stock buybacks and dividends. The company bought back $347 million in stock for the quarter and $2.23 billion in all of 2018. The buybacks decreased Corning's shares outstanding to 788 million, down 9% from last year and down nearly 50% from 2011.
Since late 2015, Corning has returned $11.8 billion to shareholders through the combination of buybacks and dividends. It also has increased the dividend 50% during that time frame. Last year, the quarterly payouts were increased 16% from 15.5 cents a share to 18 cents; the prior year's dividend increase was nearly 15%. The question now is whether the company will increase the dividend this year, and if so, by how much?
We should know as early as next week whether Corning sticks to the pattern of the last four years of increasing the dividend in February after keeping it steady for four quarters. Judging by the increases of the last couple years, one could expect the new dividend rate to be in the range of 21.5 cents to 22 cents. That would put the indicated dividend yield in the 2.6% range, up from the current 2.1%. Of course, whether there will be a dividend increase at all is conjecture at this point, but we'll know soon.
Corning is a good example of the potentially powerful combination of stock buybacks and simultaneously increasing dividends. Shareholders have been well-rewarded since the company began to focus on both in late 2015.