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

Corning Inc. (NYSE: GLW) stock has dropped more than 6% in early trading today (Tuesday) on news that its Q4 revenue was down 2% from the previous year. Corning also warned investors that it will produce less display glass in 2014's first quarter - but that drop is in line with normal seasonality.

That news initially scared off investors, but there was plenty of bullish information in today's earnings report.

Corning reported Q4 earnings per share of $0.29, which beat analysts' projections of $0.27 and beat last year's earnings per share (EPS) by 4%. The company reported revenue of $2 billion, which also surpassed projections of $1.93 billion.

For the full year 2013, Corning reported core sales of $7.95 billion, up 5% from $7.61 billion in 2012.

GLW also announced that its volume of LCD glass production reached record levels, with a 4% increase from last year.

Display technologies have been the hallmark of Corning's success for the past decade, but the company did report a 12% increase in sales year over year for its "Optical Communications" segment.

That diversification is good news to investors - here's how it will boost the stock this year.

Innovation Key for Corning (GLW)

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.

So the name of the game for GLW investors is innovation. As the pioneer of display glass technology for mobile devices, GLW stock has room to grow as long as it keeps ahead of its competitors.

Today, the company spoke briefly about its future plans, which was a good sign for investors...

According to the company, it will wait to provide investors with its 2014 outlook until Feb. 7, when it holds its annual investor relations meeting.

"We are excited about opportunities to open new market applications for Gorilla Glass. There was a very positive reaction to our new Antimicrobial Corning(R) Gorilla(R) Glass at the Consumer Electronics Show earlier this month. And, we expect to expand Gorilla Glass into the automotive and architectural markets this year," Corning's Vice Chairman and Chief Financial Officer James Flaws said in a statement.

At the investor relations meeting, investors will be curious to see Corning's plan for entering the "bendable display glass" market, which was a major trend at CES 2014.

Huge Potential for Corning (NYSE: GLW) Stock

Some investors have been pensive about 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 could be seen as 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 Technologies.

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

Money Morning 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."

Another bullish sign for investors is Corning's recent 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.

Overall, Corning stock is up 49% in the last 12 months. Look for it to head higher in 2014 - even if today's earnings give it a slight pullback.

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