Innovation Should Keep Corning (NYSE: GLW) Stock Climbing After Earnings

Corning Inc. (NYSE: GLW) stock traded even yesterday (Monday) ahead of earnings, as analysts predict the company will report an earnings per share (EPS) of $0.27 on revenue of $1.93 billion in the start of a big year for GLW.

While those estimates are down from last year's EPS of $0.34 and revenue of $2.15 billion, that's not a bearish sign for Corning stock investors.

Corning NYSE: GLW Jan 27 loading chart... Price: 18.22 | Ch: 0.01 (0.1%)

Here are a few things to watch in today's earnings report.

The most important information to look for in GLW'S earnings release will be any product updates or innovation from Corning.

Corning is a technology-based company, best known for developing the display glass used in smartphones and tablets. According to the company, 37% of its revenue is generated by "display technologies."

It's most well-known product, "Gorilla Glass," has been used in more than 1 billion mobile devices worldwide. Corning has continued to upgrade its hallmark product, unveiling "Gorilla Glass 2.0" in 2012.

Earlier this month, Corning announced a third version of Gorilla Glass at the Consumer Electronics Show 2014 (CES 2014) in Las Vegas. According to the company, the new glass will be 40% more scratch-resistant than previous versions - good news for anyone who has ever dropped their smartphone.

Since Corning is a pioneer in mobile display technology, investors should watch and see if it announces entrance into another market: bendable display glass. One of the major trends of CES 2014 was "bendable televisions" that use this flexible glass.

Continued signs of strong spending in research and development will be another good sign for investors. From September 2012 through September 2013, the company had spent more than 9% of its annual revenue ($726 million) on R&D. This commitment has kept Corning ahead of its competitors.

Investors should also be on the lookout for figures relating to Corning's new joint venture with Samsung.

In October, the two companies announced that Corning would take over a glass manufacturer in South Korea that was jointly owned by the two companies. At the same time, Samsung made a $2.3 billion investment in Corning, meaning it owned approximately 7% of the tech company.

Samsung is the largest smartphone developer in the world, and the news initially sent Corning stock up 25% the day of the deal. Now that three months have passed since the deal was made official, investors will want to see exactly what impact the partnership has had on Corning's bottom line.

GLW stock has had an excellent year, up 50% in the last 12 months. That's despite posting less-than-stellar earnings lately.

In the third quarter, GLW saw a 22% drop in earnings from the previous year. For today's Q4 report, estimates have already been downgraded $0.06 per share.

One news item that will make investors pensive is Apple's (Nasdaq: AAPL) recent patent proposal for its own brand of smartphone display glass. Apple is one of Corning's largest customers, and developing its own line of display glass would be a huge blow to GLW.

Apple applied for the patent in September and reportedly has a factory in Arizona that is operated by GT Advanced technology. If Apple can successfully replace Corning, it would deal a major blow to GLW stock in the long term.

But Apple won't switch away from Corning overnight, and moving forward, Corning is still the king of display glass technology.

Money Morning's Executive Editor Bill Patalon is a big believer in Corning stock and thinks the stock should outperform regardless of Apple's plans.

"And even as Corning doomsayers misinterpret the outlook for Gorilla Glass, they're also not paying attention to the company's next hot product - a 'bendable' material known as 'Willow Glass,'" Patalon told readers this month. Like Gorilla Glass, bendable glass is a material that's perfect for the wearables market."

According to MarketWatch, seven analysts have GLW rated as a "buy" and nine have the stock listed as a "hold." Currently, three have the stock listed as "overweight."

Corning (GLW) earnings will come out today before the bell.

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