Corning Details Path to Growth Opportunities
Strength seen across all business segments
CORNING, N.Y., February 04, 2011 – Executives at Corning Incorporated (NYSE:GLW) will detail a path to achieve $10 billion in sales by 2014 when they speak at the company’s annual investor meeting in New York at 9 a.m. today. Corning recently announced 2010 sales of $6.6 billion.
“Global innovation is at the heart of Corning today and has been for our 160-year history,” Wendell P. Weeks, chairman, chief executive officer, and president, will tell investors. “Our capabilities in glass and ceramics have the potential to deliver solutions across many industries that address significant global technology trends, driven by consumer desires to access and share information wherever they are, whenever they want,” he will say. “We envision a world where technology enables seamless delivery of real-time information…a natural and intuitive interaction with the virtual world. This is a world of specialty glass with vivid displays, multi-functional ‘smart’ surfaces, and interactive devices.”
Weeks will point out that these devices require unique specialty glass that is lightweight, highly damage resistant, elegant in design, and environmentally friendly. As communications become increasingly ubiquitous, carriers must invest in high-speed networks with massive bandwidth capacity. “Both are areas in which Corning has been the world’s technology leader for many decades,” he will add.
Path to $10 billion in sales
Rapidly expanding consumer demand for greater touch-screen capability, mobile computing and increased affordability of PCs in emerging economies - combined with the continued expansion of LCD TVs around the world - are likely to create demand for an additional two billion square feet of new LCD glass between now and 2014, James P. Clappin, president, Corning Glass Technologies Group, will explain.
Clappin will say that a market shift to mobile computing will continue over the next several years, motivated by the rapid growth of tablets in the personal computer space. Corning believes the PC market could grow at a compound annual rate of about 16% through 2014. “This presents an exceptional growth opportunity for Corning. Both our EAGLE XG® Slim and Corning® Gorilla® Glass have emerged as industry leaders for this fast-growing tablet segment,” he will say. He also will add that LCD should remain the TV technology of choice, driven by growth in emerging regions and a shortened TV replacement cycle. “Our research indicates that the LCD TV replacement rate should be twice that experienced with traditional CRT televisions,” he will comment. Clappin also will say that the number of televisions per household and the penetration of LCD TVs as a percentage of the worldwide installed base are expected to have more room to grow in the future. “At the end of 2010, only 27% of all TVs worldwide were LCD units,” he will note. In summarizing 2011 expectations, Clappin will point out that the company expects the overall LCD glass market to reach between 3.6 billion and 3.8 billion square feet, and that glass supply and demand should remain balanced.
Corning® Gorilla® Glass opportunities
Moving to Corning’s fastest-growing product, Gorilla Glass, Clappin will say the company is committed to capturing additional market opportunities in the handheld and IT device space. “Corning Gorilla Glass is the cover glass of choice for manufacturers of high-end mobile phones. We expect the number of these devices using cover glass to quadruple over the next four years, presenting us with a significant opportunity for growth,” he will remark. An even larger opportunity for Corning’s Gorilla Glass is the emergence of tablet computing, Clappin will point out. Corning estimates that tablet computer sales could grow from roughly 20 million units last year to almost 180 million by 2014. “What makes the tablet market so appealing for us is that all of these devices will likely require a highly durable, scratch-resistant piece of cover glass,” he will say.
“Our ability to manufacture Gorilla Glass at 0.7 mm or thinner gives us the potential to quickly grow our presence in the flat-panel television market. The unparalleled surface quality and scratch resistance supports both new edge-to-edge design trends and improved optical viewing experiences,” he will comment.
Clappin will add that Corning continues to innovate with the ability to apply Gorilla Glass to other attractive markets such as architectural, automotive, and appliance industries.
“The telecommunications market is moving into a renewed investment cycle driven by growing wireless, fiber-to-the-home, and data center (enterprise) market opportunities,” Clark S. Kinlin, president and chief executive officer, Corning Cable Systems, will tell investors. The optical wireless component of the market should have a compound growth rate of 20% or better through 2014, he will remark, “with bandwidth demand growing at 40% over the next few years.” Globally, over 400 million new mobile subscribers are expected to be added in 2011 alone. Corning’s planned acquisition of MobileAccess provides the company with an accelerated path into this exciting market opportunity.
Kinlin will say that FTTH installations are set for a new wave of deployments around the globe, driven by customer demand for more advanced video services and 4G mobile broadband. Fiber-to-the-home installations should grow at a compound rate of 18% for several years.
Corning’s Pretium EDGE™ data center solution is also expected to continue to build significant market acceptance. In 2010 Corning again expanded its optical fiber and cable manufacturing presence in China to support the fast growing wireless and FTTH in-country markets.
“Corning is poised to grow our telecommunications sales by 15% this year,” Kinlin will conclude.
Corning’s Life Sciences segment is poised to double its revenues from $500 million to $1 billion by 2014, driven primarily by broadening its new business platforms, selectively pursuing additional acquisitions to expand the company’s product portfolio, and growing its established businesses. Mark A. Beck, senior vice president, Corning Life Sciences, will say, “China represents a geographic expansion opportunity for the segment’s existing business.” He will explain that as the country’s pharmaceutical industry continues to flourish, the region’s research and development spending is expected to grow at a compound rate of 24% through 2014. Corning is investing to capitalize on the growth potential of this important region and will open a local manufacturing and distribution center later this year.
Corning’s Environmental Technologies segment has the potential for significant growth over the next several years James B. Flaws, vice chairman and chief financial officer, will explain. He will add that the automotive industry saw a strong recovery in 2010 and Corning anticipates worldwide auto production could reach 77 million vehicles in 2011. Automotive substrate orders increased 28% last year. Flaws will point out that global auto demand in developing regions (Brazil, Russia, India, and China) is expected to remain strong for several years and eventually could surpass growth levels in developed regions. China became the world’s largest market for autos in 2009.
Flaws also will point out that there are positive indications that the long-stagnant U.S. trucking industry may be turning around. New regulations requiring emission-control systems for non-road diesel vehicles in several countries, as well as for heavy-duty diesel engines in Europe, will create additional opportunities for Corning over the next several years.
“Innovation remains critical to Corning building entirely new businesses,” Flaws will say. The company is making a major investment in research and development for photovoltaics. Corning is in the process of expanding manufacturing capabilities at the company’s Harrodsburg, Ky., plant to begin producing PV glass early in 2012. The company is targeting late 2011 for its first photovoltaic glass customer. New businesses such as PV and others built from adjacent technology innovations are expected to generate up to $500 million in new sales in the future.
Investing for growth
In order to capture these significant growth opportunities, Corning expects 2011 capital spending to be in the range of $2.4 billion to $2.7 billion, primarily in support of expanding LCD and Corning Gorilla Glass capacity and investments in its environmental and life sciences businesses.
“Corning is a growth company. We believe we have noteworthy sales growth across each of our businesses this year as we build toward our $10 billion target. Our growth engine will be driven by growing market demand for Gorilla Glass, continued LCD glass demand as flat-panel televisions begin penetrating new developing markets, increased worldwide auto production and a rebound in heavy-duty diesel engine production, and a stronger overall telecommunications market for fiber-to-the-home and enterprise solutions,” Flaws will conclude.
Conference Broadcast Information
Corning’s annual investor meeting will be held on Friday, Feb. 4 at Cipriani, located at 110 E. 42nd Street, New York. Corning’s products and technologies will be on display from 7:30 a.m. – 9 a.m. Corning will make the presentation at its annual investor conference available to the public through a video and audio webcast and telephone access. The broadcast will begin at 9 a.m. EST. The dial-in number is (800) 230-1092 (U.S.) or (612) 288-0337 (international). The password is 2011 IR Meeting. The leader is Ken Sofio. A replay of the call will be available at 1 p.m. EST and will run through 5 p.m. EST on Friday, Feb. 18, 2011. To access the replay, dial (800) 475-6701 (U.S.) or (320) 365-3844 (international). The access code is 190966. The audio 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
Investor Relations Contact:
Kenneth C. Sofio
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