CORNING, N.Y., January 26, 2016
- Corning Incorporated (NYSE: GLW) today announced its results
for the fourth quarter and full-year 2015. Highlights of the report
include:
- Business segment performance
consistent with the company's expectations;
- Moderate LCD glass price
declines;
- Significant progress on the
company's new strategy and capital allocation framework;
and
- Substantial progress on
extending Japanese yen hedges.
Fourth-Quarter 2015
Results
For the fourth quarter of 2015, Corning reported core sales* of
$2.4 billion and core earnings per share of $0.34, compared with
$2.5 billion and $0.42, respectively, in 2014. Net sales (GAAP) for
the fourth quarter were $2.2 billion and GAAP earnings per share
were $0.17, compared with $2.4 billion and $0.70, respectively, in
2014.
Full-Year 2015
Results
For the full-year 2015, core sales were $9.8 billion and core
earnings per share were $1.40, compared with $10 billion and $1.42,
respectively, in 2014. Net sales (GAAP) for 2015 were $9.1 billion
and GAAP earnings per share were $1.00, compared with $9.7 billion
and $1.73, respectively, in 2014. Adjusted operating cash flow for
the full year remained strong at $3.2 billion.
"Our fourth-quarter performance was in line with
our expectations," Wendell P. Weeks, chairman, chief executive
officer and president, said. "Our long-term supply contracts and
effective pricing strategies in our Corning Glass Technologies
businesses continue to be particularly beneficial, and technology
trends in optical communications continue to drive growth."
"We were especially pleased to mark several major
successes right out of the gate on our new strategy and capital
allocation framework which outlines our priorities for the next
four years: to focus our portfolio and utilize our financial
strength," Weeks noted.
*Core performance measures 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 and Korean won foreign exchange rates, 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.
Significant Progress on the
Strategy and Capital Allocation Framework
In October 2015, Corning announced a new strategy and capital
allocation framework that targets generating and deploying more
than $20 billion through 2019, with the majority of these funds
expected to come from operating cash flow. The company plans to
invest approximately $10 billion in opportunities to grow and
sustain its leadership positions, and return more than $10 billion
to shareholders.
In the fourth quarter of 2015, Corning marked
early progress against the new strategy and capital allocation
framework. The company:
- Generated significant cash flow in the quarter,
resulting in $3.2 billion in adjusted operating cash flow for the
year, despite continuing global economic weakness.
- Attained a moderate LCD glass price decline in
the quarter, achieving the lowest sequential decline of the year.
For 2015, the aggregate LCD glass price decline was the lowest in
five years.
- Initiated a $1.25 billion accelerated share
repurchase program (completed in January 2016), supporting the
company's commitment to return more than $10 billion to
shareholders.
- Announced a realignment of the company's interest
in Dow Corning, a transaction that is expected to be accretive to
the company's earnings per share and essentially tax-free. As a
result of the realignment, a newly formed entity, which will become
a wholly owned subsidiary of the company, will hold approximately
40% ownership in Hemlock Semiconductor Group and $4.8 billion in
cash. The transaction unlocks the value of Corning's interest in
Dow Corning's silicones business, which today falls outside
Corning's three core technologies, four manufacturing and
engineering platforms, and five market-access platforms.
- Established a long-term supply agreement with a
low-cash investment in a Gen 10.5 glass manufacturing facility
adjacent to BOE Technology Group, Ltd., the largest panel
manufacturer in China. The existing long-term supply agreement for
Gen 8.5 and smaller panels was extended through 2025.
- Announced that Ford's GT supercar is using
Corning® Gorilla® Glass for Automotive in its windshield and in two
other windows - an example of Corning leveraging its market access
with leading automakers to pursue disruptive opportunities while
utilizing existing assets.
Fourth-Quarter Segment
Results
- Display Technologies: Core
sales in the fourth quarter were $903 million, compared with $1,055
million in the same period a year ago. Sequential LCD glass volume
declined slightly, as expected. LCD glass prices continued to
moderate as expected and declined less than in the third quarter.
Core earnings in the fourth quarter were $234 million, compared
with $356 million in the same period last year.
- Optical Communications:
Sales in the fourth quarter were $736 million, compared with $676
million in a year ago. Core earnings were $47 million, compared
with $48 million in the fourth quarter 2014.
- Environmental Technologies:
Sales in the fourth quarter were $254 million compared with $250
million last year. Core earnings were $29 million, compared with
$36 million in the comparable period a year ago.
- Specialty Materials: Sales
in the fourth quarter were $275 million, compared with $319 million
a year ago. Core earnings for the quarter were $44 million,
compared with $30 million in the fourth quarter 2014.
- Life Sciences: Sales in the
fourth quarter were $202 million, compared with $215 million in the
previous year's quarter. Core earnings were $12 million, compared
with $18 million in the comparable 2014 period.
- Core equity earnings from Dow
Corning Corporation were $78 million, compared with $111
million in the fourth quarter 2014.
Looking Forward
"We expect the first quarter to be the weakest of 2016, and we
anticipate growth will recover in subsequent quarters," R. Tony
Tripeny, senior vice president and chief financial officer, said.
"We are encouraged with the moderation of LCD glass price declines,
and we expect this trend will continue into 2016. We are sustaining
market leadership in all of our businesses."
Corning provided the following expectations for
its business segments in the first quarter of 2016:
- Display Technologies: In the
first quarter, Corning anticipates that panel maker utilization
will continue to decline, which will reduce inventory levels in the
supply chain. As a result, the overall glass market and Corning's
LCD glass volume are expected to decline by a mid-to-high
single-digit percentage sequentially. Corning's LCD glass price
decline is expected to be moderate, achieving what will be one of
the lowest first-quarter declines in five years.
For the full year, Corning expects moderate
sequential price declines to continue, and its glass volume to grow
by a mid-single-digit percentage year over year, in line with total
glass demand growth. Corning expects global television unit sales
will grow by a low single-digit percentage, and the average screen
size will increase by at least 1.5 inches. The company expects
panel maker utilization to increase as the year progresses, and
retail LCD glass area demand to be up by a high single-digit
percentage in 2016.
During January, Corning took advantage of the
stronger yen to extend its hedges. Corning is now hedged
for approximately 70 percent of its projected yen
exposure for the period 2016 through 2022 at a blended rate
significantly below the recent spot prices. Corning will provide
more details during today's conference call.
- Optical Communications:
Corning expects first-quarter sales to increase in the
low-to-mid-single digit percentage range over its sales in the
comparable period a year ago. For the full year, the company
expects sales to increase by a mid-single-digit percentage and
exceed the goal of two times the growth rate of industry capital
expenditures.
- Specialty Materials:
First-quarter sales are expected to decline year over year by a
mid-teen percentage. For 2016, the company estimates annual sales
will grow by a low-teen percentage. The variable timing of mobile
device product launches drives Corning® Gorilla® Glass demand and
is expected to cause significant swings in quarterly results.
- Environmental Technologies:
The North American heavy-duty truck market is down after several
years of robust growth. As a result, first-quarter sales are
expected to decline by approximately 10%, compared with the same
period last year. The full-year outlook is for sales to be down by
a low single-digit percentage.
- Life Sciences: First-quarter
sales are expected to increase by a low single-digit percentage,
compared with last year. For the full year, sales are anticipated
to grow faster than the market, which is expected to be up by a low
single-digit percentage.
- Core equity earnings from Dow
Corning are expected to be approximately $45 million.
"Our very strong balance sheet and competitive
positions serve as the basis for executing on our new strategy and
capital allocation framework. We are off to a strong start in
delivering on this framework and are confident in our ability to
deliver significant returns for shareholders," Tripeny
concluded.
Upcoming Investor
Events
Corning will host investors and provide more information on its
2016 outlook at its annual investor meeting in New York on Friday,
Feb. 5, beginning at 8 a.m. at Cipriani Wall Street at 55 Wall St.
Attendees can register online at the company's investor relations
website. Investors will hear presentations from the company's
chairman and chief executive officer, Corning business leaders, and
the chief financial officer. Corning also will attend the Goldman
Sachs Media & Telecom Conference on March 1 in San
Francisco.
Fourth-Quarter Conference Call
Information
The company will host a fourth-quarter conference call on Tuesday,
Jan. 26, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1093 or for international access call (612) 332-0226
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 and
click "Events." A replay will be available beginning at 11 a.m. ET
and will run through 5 p.m. ET, Tuesday, Feb. 9. To listen, dial
(800) 475-6701 or for international access dial (320) 365-3844. The
access code is 382853. 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.
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.
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.
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
Q4 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
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