Corning (GLW) Warning

I did not realize the extent of the correlation of Corning’s earnings to the Japanese Yen. For every percentage point the yen decreases in dollar terms, Corning’s earnings for Q4 2012 (will decrease by $6mm, as the CFO stated in the last conference call. This article nicely sums up the situation.

The yen-dollar exchange rate decreased 10% through the fourth quarter, and it has become apparent to the Forex markets that Shinzo Abe will actively push for further devaluation. This means a $60mm maximum impact to Corning’s earnings.

This is a risk I am not willing to take. I want to see how the market reacts to the results, which will be announced on Tuesday. I am willing to sacrifice the profits that might be had if the stock pops on excellent results as a payment for more information on the stock. Selling a significant portion of the position on Monday.

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