CORNING, N.Y., October 27,
2015 - Corning Incorporated (NYSE: GLW) announced today a
strategic and capital allocation framework designed to return more
than $10 billion to shareholders through 2019, and also reported
results for the third quarter ended Sept. 30, 2015.
Wendell P. Weeks, chairman, chief executive
officer and president, said, "Corning is announcing a strategic and
capital allocation plan that reflects the financial and operational
strengths of our company, as well as our ongoing commitment to
capital stewardship. Through 2019, we expect to deploy more than
$20 billion by returning greater than $10 billion to shareholders,
and by investing approximately $10 billion in opportunities to grow
and sustain our leadership positions."
As a first step to delivering the plan, Corning's
Board of Directors increased the company's share repurchase
authorization by $4 billion. The company also announced plans to
commence a $1.25 billion accelerated share repurchase program
during the fourth quarter. Additionally, the company anticipates
increasing its dividend per common share by at least 10% annually
through 2019.
Overview of Strategic and Capital
Allocation Plan
Corning plans to deploy over $20 billion of capital through 2019
with the majority expected to come from operating cash flow. The
strategic and capital allocation plan consists of two primary
actions:
- Return more than $10 billion to
shareholders through share repurchases and increased dividends.
As part of this plan, Corning intends to target an adjusted
debt-to-EBITDA ratio of 2, and to reduce its global cash to
approximately $2 billion.
- Invest approximately $10 billion
in Corning's focused portfolio. Over the next four years,
Corning will concentrate its RD&E investment, capital spending,
and strategic M&A on a cohesive set of three core technologies,
four manufacturing and engineering platforms, and five
market-access platforms. Corning, already a leader in these areas,
believes its focused-portfolio approach will allow it to generate
substantial growth and returns for investors.
Corning will discuss its strategic and capital
allocation plans as part of its third-quarter conference call at
8:30 a.m. (EDT) today, the details for which follow below.
Third-Quarter 2015
Performance
Corning reported core sales of $2.45 billion* and core earnings per
share of $0.34*, compared with $2.58 billion* and $0.37 per share*,
respectively, in the third quarter of 2014. Net sales (GAAP) for
the third quarter were $2.27 billion and GAAP earnings per share
were $0.15.
Third-Quarter 2015 Financial
Comparisons
(In millions, except percentages and per-share
amounts)
|
Core Performance* |
|
Q3 2015 |
Q3 2014 |
% Change |
Core Net Sales |
$2,451 |
$2,583 |
(5%) |
Core Earnings |
$447 |
$527 |
(15%) |
Core EPS |
$0.34 |
$0.37 |
(8%) |
|
GAAP |
|
Q3 2015 |
Q3 2014 |
% Change |
Net Sales |
$2,272 |
$2,540 |
(11%) |
Net Income |
$212 |
$1,014 |
(79%) |
EPS |
$0.15 |
$0.72 |
(79%) |
*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
website. Core performance metrics (non-GAAP) are adjusted to
exclude the impact of changes in Japanese yen foreign exchange
rate, 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.
"The weakening global economy, particularly in
China, and the stronger U.S. dollar impacted all of our
businesses," R. Tony Tripeny, senior vice president and chief
financial officer, said. "We are pleased with the improving pricing
environment for LCD glass, and the strong industry acceptance of
Corning® Gorilla® Glass 4, which is growing faster than we
anticipated."
- Display Technologies: Core
sales in the third quarter were $936 million*, an 11% decrease from
$1,053 million* in the comparable period a year ago. Sequential LCD
glass volume declined slightly, and sequential LCD glass price
declines remained moderate, as expected. Core earnings in the third
quarter were $257 million*, a 15% decrease from $304 million* in
the comparable period a year ago.
- Optical Communications:
Sales in the third quarter were $747 million, a 7% increase from
$698 million for the comparable period a year ago. Core earnings in
the third quarter were $71 million*, a slight increase from $70
million* in the comparable period a year ago.
- Environmental Technologies:
Sales in the third quarter were $257 million, a 9% decrease from
$282 million in the comparable period a year ago. Core earnings in
the third quarter were $38 million*, a 33% decrease from $57
million* in the comparable period a year ago.
- Specialty Materials: Sales
in the third quarter were $288 million, a 12% decrease from $327
million for the comparable period a year ago. Core earnings in the
third quarter were $44 million*, a 17% decrease from $53 million*
in the comparable period a year ago.
- Life Sciences: Sales in the
third quarter were $211 million, a 1% decrease from $214 million
for the comparable period a year ago. Core earnings in the third
quarter were $21 million*, a 5% decrease from $22 million* in the
comparable period a year ago.
- Core equity earnings from
Dow Corning Corporation were $53 million*, a
$15 million, or 22%, decrease from the comparable period a year
ago.
Looking Forward
"We expect global economic headwinds to persist in the fourth
quarter," Tripeny said, "but we are encouraged by longer-term
industry trends. We are pleased that the LCD glass pricing
environment has been improving for more than a year, and we expect
this to continue in the fourth quarter. Consumers want larger flat
panel displays and TV screens, which should drive overall glass
volume growth. Bandwidth demand continues to grow, enabling our
Optical Communications segment to deliver an expected 10% sales
increase this year."
Corning provided the following expectations for
its business segments in the fourth quarter of 2015:
- Display Technologies:
Corning expects its fourth-quarter LCD glass volume to be down
slightly sequentially. Corning's LCD glass price declines are
expected to decline less in the fourth quarter than in the third
quarter.
- Optical Communications:
Corning expects fourth-quarter sales to increase by a
low-to-mid-single-digit percentage rate over its sales in the
comparable period a year ago.
- Specialty Materials:
Fourth-quarter sales are expected to decline at a low-teens
percentage rate on a year-over-year basis.
- Environmental Technologies and
Life Sciences: Sales of both business segments are expected to
decline at a mid-single-digit percentage rate in the fourth quarter
versus a year ago.
- Core equity earnings from
Dow Corning Corporation are expected to be
approximately $80 million*.
Upcoming Investor
Events
Corning plans to meet with investors in November and is scheduled
to present at the UBS Global Technology and Services Conference on
Nov. 17 in San Francisco and Credit Suisse Technology Conference in
Scottsdale, Arizona, on Dec. 1.
Third-Quarter Conference Call
Information
The company will host a third-quarter conference call at 8:30 a.m.
(EDT) Tuesday, Oct. 27. To participate, please call toll free (800)
230-1085; or for international access call (612) 332-0107
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,
click on "Events" and follow the instructions. A replay will be
available beginning at 11 a.m. (EDT) and will run through 5 p.m.
(EST), Tuesday, Nov. 10. To listen, dial (800) 475-6701, or for
international access dial (320) 365-3844. The access code is
370570. 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
www.corning.com/investor_relations and clicking "Financial Reports"
on the left. 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.
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.
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.
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
Q3 2015 Financial Tables
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#1961574
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