Overview
News Releases
In the News
Features
Community Stories
Awards & Recognition
Media Resources
Media Contacts
Videos
Follow Corning
RSS Feeds

News Releases

Corning Announces Second-Quarter Results

Sequential LCD Glass Price Moderates 

CORNING, N.Y., July 25, 2012 – Corning Incorporated (NYSE: GLW) today announced its results for the second quarter of 2012.

Second-Quarter Summary

  • Sales were $1.9 billion, essentially even with last quarter, but 5% lower than a year ago.
  • Earnings per share were $0.30. Excluding special items, earnings per share were $0.31,* a 35% year-over-year decline.
  • Display Technologies wholly owned business LCD glass volume declined by mid-single digits on a sequential basis and increased by mid-single digits year over year. Volume at Samsung Corning Precision Materials Co., Ltd. increased by the mid-single digits on a sequential basis, but declined by low-double digits from a year ago.
  • LCD price declines were much more moderate this quarter.
  • Telecommunications sales increased 10% sequentially and were up slightly on a year-over-year basis.
  • Specialty Materials sales, which include Corning® Gorilla® Glass, increased slightly sequentially and 5% year-over-year.

Quarter Two Financial Comparisons

 

Q2 2012

Q1 2012

% Change

Q2 2011

% Change

Net Sales in millions

$1,908

$1,920

(1%)

$2,005

(5%)

Net Income in millions

$462

$462

0%

$755

(39%)

Non-GAAP Net Income in millions*

$465

$463

0%

$758

(39%)

GAAP EPS

$0.30

$0.30

0%

$0.47

(36%)

Non-GAAP EPS*

$0.31

$0.30

3%

$0.48

(35%)

*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.

Reflecting on Corning’s second-quarter performance, Wendell P. Weeks, chairman, chief executive officer, and president, said, “We had a solid second quarter in terms of sales and earnings performance. We achieved much more moderate price declines for our LCD glass as set forth in our goals that we shared in February. Additionally, LCD glass retail and supply chain market statistics were generally in line with our expectations. As a whole, our other businesses grew 2% year-over-year.”

“However, we are concerned about the continuing economic challenges in Europe and China’s decelerating GDP growth. We have seen signs that the unsettled global economy impacted some of our businesses in the past quarter. For example, in Europe our Environmental Technologies segment saw reduced sales of light-duty filters for auto emission systems. We are alert to the fact that the economic woes may grow, and consumers may reduce their spending, which could impact our customers. If we see further weakness, we will respond with appropriate actions,” Weeks said.

Second-Quarter Segment Results
Sales in the Display Technologies segment were $641 million, a 9% sequential and 16% year-over-year decline. LCD glass price declines were, as expected, much more moderate.

Telecommunications segment sales were $559 million, a 10% sequential and 2% year-over-year increase. The sequential gain was driven by stronger optical fiber and cable products and enterprise network solutions sales. North America and China were the most robust geographies for Corning’s Telecommunications segment.

Specialty Materials segment sales were $296 million, a 3% sequential and 5% year-over-year improvement. The increase was driven by Gorilla Glass sales in the handheld and information technology device markets.

Environmental Technologies segment sales were $249 million, a 5% sequential and 3% year-over-year decline. The company saw strength in its heavy-duty diesel products sales in the quarter, offset by weakness in light-duty (auto) product sales, the result of planned seasonal auto manufacturing plant shutdowns and weakness in the European market.

Life Sciences segment sales were $162 million, representing 5% sequential and year-over-year increases. The company anticipates the completion of the BD Biosciences Discovery Labware unit acquisition by year-end, pending U.S. government regulatory approvals.

Dow Corning Corporation’s equity earnings were $61 million, increasing 74% sequentially, but declining 36% on a year-over-year basis. The second quarter increase, without one-time gains, would have been 43%*. Dow Corning saw sequential quarterly sales improvements in both its silicone and polysilicon segments.

Corning’s gross margin for the quarter was 42%, consistent with the previous quarter. The company ended the second quarter with $6.3 billion in cash and short-term investments. During the quarter, Corning spent $314 million in stock buybacks.

Looking Forward
“We are pleased with the progress we have made against the goals we outlined in February for stabilizing our Display Technologies segment earnings and growing our other businesses,” James B. Flaws, vice chairman and chief financial officer, said. “We are moving forward on new opportunities in high performance displays, and our recently formed OLED equity venture in Korea. We are excited about the possibilities for Corning® Willow™ Glass, an ultra-slim flexible glass that may enable some very unique opportunities for us.”

For the third quarter, Flaws noted that Corning expects LCD glass volume for the company’s wholly owned business and Samsung Corning Precision to grow in the low double digits sequentially. The stronger glass volume should be driven by normal industry seasonality, along with continued demand for tablet computers and larger TV sizes. Glass price declines in the quarter are expected to remain moderate.

Telecommunications segment sales are expected to be consistent with the previous quarter and consistent with normal seasonal trends. Corning expects sales of optical fiber and cable in China to remain strong.

Specialty Materials segment sales are anticipated to increase 10% to 15% sequentially, reflecting improved Gorilla® Glass sales during the quarter.

Environmental Technologies segment sales are expected to be similar to the previous quarter.

In the Life Sciences segment, Corning forecasts sales to be consistent to up slightly over second-quarter results.

Dow Corning equity earnings in the third quarter are expected to decline about 30%, driven primarily by the non-repeat of an $11 million gain in the second quarter. Normal summer manufacturing shutdowns will contribute to the sequential decline.

Corning’s tax rate in the third quarter is anticipated to be approximately 19%.

“Our first-half performance was in line with our expectations. Our LCD glass business remains highly profitable, and our other businesses in aggregate grew year-over-year,” Flaws said.

“Current economic conditions may present challenges for the near term. In spite of this, we anticipate continued growth in several of our businesses in the third quarter,” he said.

Upcoming Investor Events
Corning will present at the 2012 Citi Technology Conference in New York on Sept. 6.

Second-Quarter Conference Call Information
The company will host a second-quarter conference call on Wednesday, July 25 at 8:30 a.m. ET. To participate, please call toll free (800) 230-1085 or for international access call (612) 288-0337 approximately 10-15 minutes prior to the start of the call. The password is ‘QUARTER TWO’. The host is ‘SOFIO’. To listen to a live audio webcast of the call, go to Corning’s website 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 p.m. ET, Wednesday, August 8, 2012. To listen, dial (800) 475-6701 or for international access dial (320) 365-3844. The access code is 253774. 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 website 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 160 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.

Attached File: CORNING INCORPORATED AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME 

Media Relations Contact:
Daniel F. Collins
(607) 974-4197
collinsdf@corning.com 

Investor Relations Contact:
Ann S. Nicholson
(607) 974-6716
nicholsoas@corning.com