Continued Progress on Strategy and Capital Allocation
Framework
Strong Sequential Growth
Expected
CORNING, N.Y., APRIL 26, 2016 - Corning
Incorporated (NYSE: GLW) today announced its results for the first
quarter ended March 31, 2016, including:
- Performance in Display Technologies,
Environmental Technologies, Specialty Materials, and Life Sciences
met or exceeded company expectations.
- Demand for Optical Communications products
continues to be strong; manufacturing software implementation
issues partially interrupted cable production and impacted
first-quarter sales and profit. Production is expected to recover
in the second quarter.
- Smallest sequential first-quarter LCD glass price
decline in five years; second-quarter pricing expected to moderate
further.
- Returned more than $2 billion to shareholders
since October and announced two strategic transactions, as company
continues to deliver on its strategy and capital allocation
framework.
First-Quarter 2016
Results
For the first quarter of 2016, Corning reported core sales* of
$2.17 billion and core earnings per share of $0.28, compared with
$2.43 billion and $0.35 respectively in 2015. Net sales (GAAP) for
the first quarter were $2.05 billion and GAAP loss per share was
$0.36, compared with $2.27 billion and earnings per share of $0.29
in 2015. Corning's GAAP net income for the first quarter reflects a
non-cash, mark-to-market loss associated with the company's
currency-hedging contracts, which extend through 2022.
"We are pleased that we were able to meet overall
profit expectations in the first quarter despite the impact from a
manufacturing software implementation issue. We expect strong
sequential core sales and profit growth in the second quarter,"
Wendell P. Weeks, chairman, chief executive officer, and president,
said. "We are also making great progress on our four-year plan to
grow, return cash to our shareholders, and create significant
value."
*Core performance measures are
non-GAAP financial measures. The reconciliation between GAAP and
non-GAAP measures is provided in the tables following this news
release, as well as on the company's website. Core performance
metrics (non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen and Korean won foreign exchange rates, as well as
other items that do not reflect ongoing operations of the company.
See "Use of Non-GAAP Financial Measures" section of attached Form
8-K for details on core performance measures.
Update on the Strategy and Capital Allocation
Framework
Corning continued to deliver on its commitment to focus its
portfolio and utilize its financial strength to return more than
$10 billion to shareholders and to invest $10 billion in growth and
sustained leadership through 2019. In the first quarter, the
company announced a 12.5% increase in the quarterly dividend,
consistent with its plan to increase the dividend per share by at
least 10% annually, and repurchased $751 million of outstanding
shares. "Since announcing our new strategy and capital allocation
framework last fall, we have returned more than $2 billion to
shareholders," Weeks said.
Recently, Corning announced two strategic
transactions to advance the company's growth. In January, the
company announced a joint venture with Saint-Gobain Sekurit to
develop, manufacture, and sell lightweight automotive glazing
solutions. The joint venture will use innovative Corning® Gorilla®
Glass for Automotive in the laminated window solution. Earlier this
month, Corning announced an agreement to acquire Alliance Fiber
Optic Products (Nasdaq: AFOP), broadening its access to the
high-growth cloud data-center market.
First-Quarter Segment
Results
- Display Technologies: Core
sales were $829 million, compared with $972 million in the same
period a year ago. Consistent with guidance, sequential LCD glass
volume declined by a mid-single-digit percentage. Corning's LCD
glass price declines were moderate and the smallest sequential
first-quarter decline in five years. The company also finalized its
customer supply agreements for the remainder of 2016.
- Optical Communications:
Sales in the first quarter were $609 million, compared with $697
million in the year-ago period. Core earnings were $26 million,
compared with $72 million in the first quarter last year. The
company estimates that the first-quarter impact from production
issues associated with manufacturing software implementation issues
was approximately $100 million in sales and $40 million in profit
including additional recovery-related expenses.
- Environmental Technologies:
Sales in the first quarter were $264 million, compared with $282
million last year. Core earnings were $37 million, compared with
$48 million in the comparable period a year ago.
- Specialty Materials: Sales
in the first quarter were $227 million versus $272 million last
year. Core earnings were $32 million, compared with $46 million in
the first quarter 2015.
- Life Sciences: Sales in the
first quarter were $204 million, compared with $197 million a year
ago. Core earnings were $18 million versus $19 million last
year.
- Core equity earnings from Dow
Corning Corporation were $58 million, compared with $51 million
in the first quarter last year.
Looking Forward:
"We expect that the company's performance for the remainder of the
year will show significant improvement from first-quarter results,
and that second-quarter results will reflect the strong underlying
trends in our businesses," R. Tony Tripeny, senior vice president
and chief financial officer, said.
- Display Technologies: In the
second quarter, Corning believes that panel-maker utilization will
increase to meet demand for the second-half retail season. The
overall glass market and Corning's volume are expected to increase
by a high single-digit percentage sequentially. Corning expects the
sequential LCD glass price decline to be less than in the first
quarter, consistent with its belief in a sustained environment for
more favorable pricing. "We continue to forecast that television
units will grow on a year-over-year basis, and that the retail
glass market will grow by 8% to 10%, driven by consumer preference
for larger screens," Tripeny remarked.
- Optical Communications: For
the second quarter, Corning expects sales to increase more than 20%
sequentially as seasonal demand rises and as cable production
recovers to normal levels with the resolution of manufacturing
software implementation issues. For the second half of 2016,
Corning expects sales to be up more than 10% versus the same period
in 2015. These expectations include a continuation of the strong
demand environment, normal production levels, and the recovery of a
sizable portion of the sales missed during the first half of the
year.
- Environmental Technologies:
Second-quarter segment sales are expected to be consistent with the
same period in 2015.
- Specialty Materials:
Second-quarter sales are expected to increase year over year by a
low-single-digit percentage, driven by Corning® Gorilla® Glass
demand. For the full year, Corning expects Specialty Materials
sales to grow by a mid-to-high single digit percentage.
- Life Sciences: Sales in the
second quarter are expected to increase by a low-single digit
percentage on a year-over-year basis.
- Core equity earnings are
expected to be between $50 million and $70 million in the second
quarter, depending on the closing date of the strategic realignment
of Dow Corning announced in December 2015. The company expects the
realignment to close by June.
Upcoming Investor
Events
Corning will hold its annual meeting of shareholders at the Corning
Museum of Glass auditorium on Thursday, April 28, 2016, at 11 a.m.
EDT. A live audio webcast of the 2016 annual meeting will be held
from 11 a.m. to 12:15 p.m. EDT. To access the audio webcast, please
go to www.corning.com/investor_relations, select "Events" and click
on the annual shareholder meeting's tab "More Information" to
register and access the webcast.
Corning will participate in the 44th annual J.P.
Morgan Global Technology, Media and Telecom Conference in Boston on
May 24, 2016, and at Bernstein's 32nd Annual
Strategic Decisions Conference on June 2, 2016, in New York
City.
First-Quarter Conference Call
Information
The company will host a first-quarter conference call on Tuesday,
April 26, at 8:30 a.m. EDT. To participate, please call toll free
(877) 209-9922 or for international access call (612) 332-0718
approximately 10-15 minutes prior to the start of the call. The
host is "NICHOLSON". To listen to a live audio webcast of the call,
go to Corning's website at www.corning.com/investor_relations and
click "Events." A replay will be available beginning at 11 a.m. EDT
and will run through 5 p.m. EDT, Tuesday, May 10. To listen, dial
(800) 475-6701 or for international access dial (320) 365-3844. The
access code is 390718. The webcast will be archived for one year
following the call.
Presentation of Information in
this News Release
Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP. Corning's non-GAAP financial measures exclude
the impact of items that are driven by general economic conditions
and events that do not reflect the underlying fundamentals and
trends in the company's operations. The company believes
presenting non-GAAP financial measures assists in analyzing
financial performance without the impact of items that may obscure
trends in the company's underlying performance. Detailed
reconciliations outlining the differences between these non-GAAP
measures and the most directly comparable GAAP measure can be found
on the company's website by going to the Investor Relations page
and clicking "Financial Highlights" under the "Performance" tab.
These reconciliations also accompany this news release.
Forward-Looking and Cautionary
Statements
This press release contains "forward-looking statements" (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning's financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions; conditions in the financial and credit
markets; currency fluctuations; tax rates; product demand
and industry capacity; competition; reliance on a concentrated
customer base; manufacturing efficiencies; cost reductions;
availability of critical components and materials; new product
commercialization; pricing fluctuations and changes in
the mix of sales between premium and non-premium products; new
plant start-up or restructuring costs; possible
disruption in commercial activities due to terrorist activity,
armed conflict, political or financial instability, natural
disasters, adverse weather conditions, or major health concerns;
adequacy of insurance; equity company activities; acquisition and
divestiture activities; the level of excess or obsolete inventory;
the rate of technology change; the ability to enforce patents;
product and components performance issues; retention of key
personnel; stock price fluctuations; and adverse litigation or
regulatory developments. These and other risk factors
are detailed in Corning's filings with the Securities and
Exchange Commission. Forward-looking statements speak only as
of the day that they are made, and Corning undertakes no obligation
to update them in light of new information or future events.
Digital Media
Disclosure
In accordance with guidance provided by the SEC regarding the use
of company websites and social media channels to disclose material
information, Corning Incorporated ("Corning") wishes to notify
investors, media, and other interested parties that it intends to
use its website
(http://www.corning.com/worldwide/en/about-us/news-events.html) to
publish important information about the company, including
information that may be deemed material to investors. The list of
websites and social media channels that the company uses may be
updated on Corning's media and website from time to time. Corning
encourages investors, media, and other interested parties to review
the information Corning may publish through its website and social
media channels as described above, in addition to the company's SEC
filings, press releases, conference calls, and webcasts.
About Corning
Incorporated
Corning (www.corning.com) is one of the world's leading innovators
in materials science. For more than 160 years, Corning has applied
its unparalleled expertise in specialty glass, ceramics, and
optical physics to develop products that have created new
industries and transformed people's lives. Corning succeeds through
sustained investment in R&D, a unique combination of material
and process innovation, and close collaboration with customers to
solve tough technology challenges. Corning's businesses and markets
are constantly evolving. Today, Corning's products enable diverse
industries such as consumer electronics, telecommunications,
transportation, and life sciences. They include damage-resistant
cover glass for smartphones and tablets; precision glass for
advanced displays; optical fiber, wireless technologies, and
connectivity solutions for high-speed communications networks;
trusted products that accelerate drug discovery and manufacturing;
and emissions-control products for cars, trucks, and off-road
vehicles.
Media Relations
Contact:
Daniel F. Collins
(607)
974-4197
collinsdf@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Corning Incorporated Q1 2016
Financials
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Corning Incorporated via Globenewswire
HUG#2006661
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