Corning CEO to Address Investors at Citi Investment Research Technology Conference
Company Revises Third-Quarter Guidance
CORNING, N.Y., September 03, 2008 – Corning Incorporated (NYSE:GLW) Chairman and Chief Executive Officer Wendell P. Weeks will address investors at the Citi Investment Research Technology Conference in New York today. He will provide revisions to the company's third-quarter guidance, share updates on key topics relevant to the company's Display Technologies segment and other businesses and address questions posed by investors.
Corning is lowering its third-quarter guidance for earnings per share before special items to $0.43 to $0.45*, down from the previous guidance of $0.48 to $0.51*. Sales are now expected to be in the range of $1.58 to $1.62 billion versus previously disclosed guidance of $1.65 to $1.72 billion. The company also revised its third-quarter gross margin expectation from at least 50% to about 47%. The guidance reductions are primarily related to lower-than-expected shipments of LCD glass in the company's wholly owned display business. With these changes, Corning’s third-quarter earnings per share, before special items, should be up approximately 15% on a year-over-year basis.
Weeks will say, "We continue to see evidence of ongoing strength in the retail market for LCD TVs, a key growth area for the LCD glass industry. However, the supply chain correction, as outlined in our second-quarter conference call, is taking longer than we expected. We believe that the set assembly portion of the supply chain built too much inventory in the first half of this year. As set assemblers have continued to hold back on orders, panel makers have lowered prices and reduced utilization rates to balance the supply chain. We think these utilization cutbacks will continue into September in Taiwan. As a result, we now expect third-quarter sequential volume for Corning’s wholly owned display glass business to be down about 5% versus our previous guidance of flat to up 5%."
"It is important to note that these utilization reductions are not affecting our LCD glass shipments at Samsung Corning Precision Glass Co., Ltd (SCP) in Korea. In fact, shipments in Korea could be above our original guidance. The stronger Korean market is not unexpected, given the strength of the major Korean brands. The combined growth of our wholly owned LCD business and SCP will be up 4% to 9% sequentially."
*These 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 investor relations website.
Corning also said that it has seen lower-than-expected sales in its Environmental Technologies segment, with sequential sales now expected to be down 10% versus previous guidance of flat growth, due to continued weakness in the automotive and heavy-duty truck industries.
Dow Corning Corporation has also experienced some order weakness in August in its core silicone business. As a result, Corning expects Dow Corning Corporation earnings to be up 15% sequentially versus the previous guidance of 20% to 30% growth. There has been no change to Hemlock Semiconductor's third-quarter outlook.
Weeks will add, "We are encouraged by another month of strong LCD TV retail sales in the U.S., Japan and China. This supports our belief that the utilization cutbacks by the panel makers is in response to a normal supply chain correction – and not a change in end market demand. We anticipate that consumers will see excellent price levels in the back-to-school and holiday seasons, which should continue to advance this positive retail trend.”
"We continue to believe that the LCD glass market will grow substantially this year but the supply chain correction will probably drive that growth toward the center of our previous 25% to 30% range. We remain optimistic about the LCD business and other key areas of long-term growth opportunity for Corning."
Corning’s presentation to investors at the Citi Investment Research Technology Conference will be available via webcast by accessing the investor events calendar on Corning’s Web site at www.corning.com/investor_relations.
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 net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company’s non-GAAP measures exclude adjustments to asbestos settlement reserves required by movements in Corning’s common stock price, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies, and gains from discontinued operations. The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company’s underlying performance. These non-GAAP measures are reconciled on the company’s Web site at www.corning.com/investor_relations and accompanies this news release.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes in global economic and political conditions; currency fluctuations; product demand and industry capacity; competition; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; changes in the mix of sales between premium and non-premium products; new plant start-up costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political instability 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; stock price fluctuations; and adverse litigation or regulatory developments. Additional risk factors are identified 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.
Attached File: CORNING INCORPORATED AND SUBSIDIARY COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Media Relations Contact:
Daniel F. Collins
Investor Relations Contact:
Kenneth C. Sofio