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Corning Announced Third-Quarter Financial Results

Corning® Gorilla® Glass gains strong market acceptance 

CORNING, N.Y., November 01, 2010 – Corning Incorporated (NYSE:GLW) today announced its results for the third quarter of 2010.

Third-Quarter Highlights

  • Sales were $1.6 billion, a 6% sequential decline, but an 8% increase year over year.
  • Earnings per share were $0.50. Excluding special items, earnings were $0.51,* a 12% sequential decline, but 21% increase year over year.
  • Display Technologies’ combined glass volume, which includes its wholly owned business and Samsung Corning Precision Materials Co., Ltd., declined 8% sequentially — in line with the worldwide glass market — but increased 7% year over year.
  • Specialty Materials sales increased 26% sequentially and 77% year over year driven by strong sales in Corning® Gorilla® Glass and advanced optics.
  • Gross margin was 45%, lower than second-quarter gross margin of 48%, but an increase of 4% from a year ago.

Quarter Three Financial Comparisons


Q3 2010

Q2 2010

% Change

Q3 2009

% Change

Net Sales in millions






Net Income in millions






Non-GAAP Net Income in millions*


















*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 Web site.

Remarking on the third-quarter performance, Wendell P. Weeks, chairman and chief executive officer, said, “Nearly all of our businesses had strong performances this past quarter.  We are very pleased with the expanding market pull for Corning® Gorilla® Glass, the renewed strength in automotive and diesel emissions control products sales, and the continued demand for fiber-to-the-home and data center solutions from our telecommunications business customers. 

“And while our LCD glass business adjusted with the supply chain correction that occurred in the third quarter, global retail demand for LCD products continued to show year-over-year growth in all markets other than televisions in the U.S.”

Third-Quarter Segment Results
Sales in the Display Technologies segment were $645 million, declining 23% sequentially and 5% year over year. Volume at the company’s wholly owned business declined about 25% sequentially and 5% year over year. Display Technologies’ performance benefited from a favorable Japanese yen-to-U.S. dollar exchange rate in the quarter. Glass price declines in the third quarter were comparable to the second quarter.   

Samsung Corning Precision Materials’ volume was up 5% on a quarterly basis and 14% year over year. 

Telecommunications segment sales were $464 million, an increase of 5% sequentially and 3% year over year. The improved performance was driven by continued demand for fiber-to-the-home products in North America and enterprise data center solutions globally.

Environmental Technologies segment sales were $208 million, a 13% quarterly and 25% year-over-year improvement. The company saw continued growth in both automotive and diesel emissions control products. The business improved its manufacturing performance in the quarter and continues to work toward increasing capacity to meet higher product demand. 

Specialty Materials segment sales were $159 million, a 26% increase from the second quarter and 77% improvement year over year. Corning’s Gorilla Glass drove much of the quarter increase, but the segment also saw improved sales in its advanced optics business.

Life Sciences segment sales were $125 million, even with the previous quarter, and a 36% improvement year over year. This improvement was driven mostly by the acquisition of Axygen Biosciences, Inc. which occurred in September of last year.   

Corning’s equity earnings totaled $504 million, compared with $474 million in the previous quarter and $418 million a year ago.   

Looking Forward
“We have seen a modest increase in utilization rates at the Taiwanese panel makers in October,” said James B. Flaws, vice chairman and chief financial officer. “We believe this is in response to lower panel inventory levels and expectations for good worldwide retail demand during the upcoming holiday season. Our glass demand forecast is based on the assumption panel maker utilization rates will remain modestly higher the remainder of the fourth quarter in comparison to a much weaker September.

“However, panel maker utilization rates this quarter may not rebound to the level they were prior to the inventory correction. As a result, we anticipate worldwide glass market demand could be flat to down slightly quarter to quarter,” Flaws said.

The company expects the movement in combined glass volume at both its wholly owned business and SCP to be in line with the market in the fourth quarter.

Flaws added, “We expect glass pricing at both our wholly owned business and SCP to decline in the mid-single digit range in the fourth quarter. This decline would be more than previous quarters and reflects pricing pressure caused by the current imbalance of glass supply and demand.”

Following a strong third quarter, Corning expects fourth-quarter Telecommunications segment sales to experience a seasonal decline of about 10%, consistent with historical fourth-quarter performance. Environmental Technologies segment fourth-quarter sales are expected to be similar to the third quarter as growth in diesel offsets normal seasonal declines in the auto business. Specialty Materials segment sales are expected to grow 10% to 20% in the fourth quarter, driven primarily by continued strength in Corning® Gorilla® Glass sales for smartphones, slates, and other computing devices. Life Sciences segment sales, excluding the impact of its recent acquisition, are expected to be down slightly, due to seasonal adjustments. 

“We typically experience seasonal declines in many of our businesses in the fourth quarter which will reduce profits somewhat,” Flaws said. “Overall, the global display business continues to do quite well at the retail level and if this continues, coupled with the current utilization rates at panel makers, we expect the supply chain to exit the year with normal inventories. Of course, we must remain cautious about the potential negative impacts that global economic conditions could have on future retail trends.”  

Corning ended the third quarter with $5 billion in cash and short-term investments, up from $4.3 billion last quarter. Looking ahead, the company expects to repatriate approximately $1.1 billion in cash from non-U.S. locations in the fourth quarter. The company also revised its 2010 capital expenditure guidance, from $1.2 billion to $1 billion this year. The company made no changes to its expectations for 2011 capital spending, which is forecasted to be more than $2 billion. “We expect to end the year with our balance sheet in great shape. This will provide us with significant financial flexibility for 2011," Flaws said.

In other matters, Corning has decided to discontinue its development and commercialization of synthetic green lasers. Given the rapid development of native green technology, the company concluded that the market for synthetic green lasers is limited.    

“We have made excellent progress in a number of our businesses this year. Corning® Gorilla® Glass sales for IT and handheld devices are exceeding our expectations and we anticipate starting shipments of TV cover glass this quarter. We are encouraged by the strength of the telecommunications market, especially with regard to our Pretium EDGE™ data center solutions and fiber-to-the-home products. Additionally, we have made significant progress in our thin-film photovoltaic development program. And we are improving our manufacturing performance and capacity to meet the strengthened demand we are seeing for our automotive and diesel engine emissions control solutions,” Flaws concluded. 

Upcoming Meetings
Corning will host an open luncheon for investors in Toronto, Canada on Wednesday, Nov. 3.  For information on how to attend the luncheon, contact Corning’s Investor Relations Department. The company will present at the Barclays Technology Conference in San Francisco Dec. 8, and Corning will host its annual investor meeting Friday, Feb. 4 beginning at 8 a.m. in New York.  

Third-Quarter Conference Call Information
The company will host a third-quarter conference call on Monday, Nov. 1 at 8:30 a.m. ET. To participate, please call toll free (800) 553-0288 or for international access call (612) 332-0630 approximately 10-15 minutes prior to the start of the call. The password is ‘QUARTER THREE’. The host is ‘SOFIO’. To listen to a live audio webcast of the call, go to Corning’s Web site at www.corning.com/investor_relations and click Investor Events on the left. A replay will be available beginning at 10:30 a.m. ET and will run through 5:00 p.m. ET, Monday, Nov. 15, 2010. To listen, dial (800) 475-6701 or for international access call (320) 365-3844. The access code is 174406. 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 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, 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. Reconciliation of these non-GAAP measures can be found on the company’s Web site by going to www.corning.com/investor_relations and clicking Financial Reports on the left. Reconciliation also accompanies 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.

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.


Media Relations Contact: 
Daniel F. Collins 
(607) 974-4197 

Investor Relations Contact:
Kenneth C. Sofio
(607) 974-7705

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