Strategy and Capital Allocation Framework continues to
deliver value to shareholders
CORNING, N.Y. - Corning
Incorporated (NYSE: GLW) today announced results for second-quarter
2017.
News Summary:
- Excellent second-quarter results demonstrate the
company's continued positive momentum: GAAP and core sales both up
6% year over year to $2.5 billion and $2.6 billion respectively;
both GAAP and core EPS were $0.42 for the second quarter and both
were up sequentially
- Strong business-segment performance:
year-over-year sales increases of 13% in Optical Communications and
27% in Specialty Materials; Display Technologies' sequential glass
price declines moderated further and glass volume was up as
expected
- Company remains on track to deliver full-year
business objectives and Strategy and Capital Allocation Framework
goals
- Ongoing progress on Strategy and Capital
Allocation Framework initiatives:
- Returned $7.4 billion to shareholders since October
2015, while investing for sustained leadership and growth
- Focused and cohesive portfolio continues to create
significant value for shareholders and delight customers, including
recent introduction of Corning Valor(TM) Glass, a
revolutionary new pharmaceutical glass packaging solution
"We are very pleased with our first-half
performance and we remain on track to achieve our Strategy and
Capital Allocation Framework goals," Wendell P. Weeks, chairman,
chief executive officer and president, said. "Our focused and
cohesive portfolio continues to deliver innovative solutions that
help our customers address their toughest challenges. Corning
Valor(TM) Glass, a remarkable pharmaceutical packaging solution
that helps protect patients and improves pharmaceutical
manufacturing, is a great example of how we work with industry
leaders like Merck and Pfizer to create breakthrough
innovations."
Strategy and Capital Allocation
Framework Progress
Corning's Strategy and Capital Allocation Framework defines the
company's leadership priorities through 2019. The Framework is
designed to create significant value for shareholders by focusing
the company's portfolio and leveraging its financial strength.
Corning has made significant progress on its goal to return more
than $12.5 billion to shareholders through 2019. In the second
quarter, the company returned nearly $800 million through dividends
and share buybacks. Since the Framework was announced in October
2015, the company has returned $7.4 billion to shareholders.
Corning is also investing approximately $10 billion in growth and
sustained leadership.
"Corning creates value by inventing
category-defining products, developing scalable manufacturing
platforms, and building strong, trust-based relationships with
customers who are leaders in their industries," Weeks said. "In
addition to the announcement of Corning Valor(TM) Glass packaging
with Merck and Pfizer last week, Verizon and Apple also announced
important collaborations with us during the second quarter. These
votes of confidence underscore how vital Corning's capabilities are
to our customers' ecosystems, which bodes well for our future
growth."
Second-Quarter 2017 Results
and Comparisons (In millions, except per-share amounts)
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP
Net Sales |
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$ |
2,497 |
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$ |
2,375 |
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5% |
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$ |
2,360 |
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6% |
GAAP
Net Income* |
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$ |
439 |
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$ |
86 |
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410% |
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$ |
2,207 |
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(80%) |
GAAP
EPS* |
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$ |
0.42 |
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$ |
0.07 |
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500% |
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$ |
1.87 |
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(78%) |
Core
Sales** |
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$ |
2,590 |
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$ |
2,485 |
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4% |
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$ |
2,440 |
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6% |
Core
Earnings** |
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$ |
431 |
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$ |
407 |
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6% |
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$ |
434 |
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(1%) |
Core EPS** |
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$ |
0.42 |
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$ |
0.39 |
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8% |
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$ |
0.37 |
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14% |
*Second-quarter 2016 GAAP Net
Income and EPS included a one-time $2.7 billion non-taxable gain on
strategic realignment of Dow Corning.
**Core performance measures are
non-GAAP financial measures. The reconciliation between GAAP and
non-GAAP measures is provided in the tables following this news
release, as well as on the company's website. Core performance
metrics (non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen and Korean won foreign exchange rates, as well as
other items that do not reflect ongoing operations of the company.
Corning does not forecast the movement of the Japanese yen against
the U.S. dollar or other items that do not reflect ongoing
operations. As a result, the company is unable to provide guidance
on a GAAP basis. See "Use of Non-GAAP Financial Measures" for
details on core performance measures.
Segment Results and
Outlook
Display Technologies:
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP Net Sales |
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$ |
748 |
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$ |
736 |
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2% |
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$ |
801 |
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(7%) |
GAAP Net Income |
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$ |
211 |
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$ |
249 |
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(15%) |
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$ |
204 |
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3% |
Core Sales** |
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$ |
841 |
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$ |
846 |
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(1%) |
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$ |
880 |
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(4%) |
Core Earnings** |
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$ |
240 |
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$ |
256 |
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(6%) |
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$ |
237 |
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1% |
NOTE: In all segments except the
Display Technologies segment, core net sales are consistent with
GAAP net sales. Because a significant portion of Display
Technologies' sales are denominated in Japanese yen, this segment's
net sales are adjusted to remove the impact of translating yen into
U.S. dollars.
In the second quarter, Display Technologies
reported strong results, with core sales of $841 million and core
earnings of $240 million. Compared with the first quarter, the LCD
glass market and Corning's volume were up by a low-single digit
percentage. LCD glass prices declined moderately, and substantially
less than the first quarter.
In the third quarter, the overall LCD glass market
and Corning's volume are expected to increase by a low single-digit
percentage sequentially. Sequential glass price declines should be
moderate and similar to the second-quarter sequential decline.
"For the year, we anticipate glass demand will be
up by a mid-single digit percentage, in line with the overall
market. We expect glass prices to decline 10% or less this year,"
Tony Tripeny, senior vice president and chief financial officer,
said.
Optical Communications:
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP
Net Sales |
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$ |
882 |
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$ |
818 |
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8% |
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$ |
782 |
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13% |
GAAP
Net Income |
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$ |
101 |
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$ |
82 |
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23% |
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$ |
77 |
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31% |
Core Earnings** |
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$ |
108 |
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$ |
93 |
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16% |
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$ |
86 |
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26% |
Optical Communications sales in the second quarter
rose 13% year over year. The increase was driven by continued
strong demand in the North American fiber-to-the-home market. In
the third quarter, sales are expected to be up more than 10% on a
year-over-year basis.
Environmental
Technologies:
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP
Net Sales |
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$ |
263 |
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$ |
275 |
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(4%) |
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$ |
259 |
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2% |
GAAP
Net Income |
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$ |
32 |
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$ |
31 |
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3% |
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$ |
37 |
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(14%) |
Core Earnings** |
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$ |
32 |
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$ |
37 |
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(14%) |
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$ |
37 |
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(14%) |
In Environmental Technologies, second-quarter
sales increased 2% year over year, led by worldwide growth in the
auto market and additional business wins. For the third quarter,
sales are expected to increase by a low single-digit percentage
compared to the same period a year ago.
Specialty Materials:
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP
Net Sales |
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$ |
337 |
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$ |
300 |
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12% |
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$ |
266 |
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27% |
GAAP
Net Income |
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$ |
56 |
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$ |
48 |
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17% |
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$ |
38 |
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47% |
Core Earnings** |
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$ |
58 |
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$ |
48 |
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21% |
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$ |
48 |
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21% |
Specialty Materials second-quarter segment sales
rose 27% year over year, led by stronger Gorilla Glass shipments.
For the third quarter, the sales growth rate is expected to
increase by a low-to-mid teen percentage.
Life Sciences:
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Q2
2017 |
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Q1
2017 |
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%
change |
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Q2
2016 |
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%
change |
GAAP
Net Sales |
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$ |
221 |
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$ |
210 |
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5% |
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$ |
215 |
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3% |
GAAP
Net Income |
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$ |
14 |
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$ |
17 |
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(18%) |
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$ |
17 |
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(18%) |
Core Earnings** |
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$ |
19 |
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$ |
20 |
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(5%) |
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$ |
21 |
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(10%) |
In Life Sciences, second-quarter sales increased
$6 million on a year-over-year basis. For the third quarter, sales
are expected to grow by a low single-digit percentage on a
year-over-year basis.
Conclusion
"Our strong first-half performance gives us confidence that we will
meet our full-year business objectives," Tripeny said. "Our
portfolio includes five very powerful market-access platforms and
we are beating our competition in each. Our commitment to
innovation and lowest-cost manufacturing gives us a significant
competitive edge. And we continue to demonstrate that we are
successfully leveraging our strong customer relationships across
all of our platforms."
Upcoming Investor
Events
Corning will attend the Jeffries 2017 Semiconductor, Hardware and
Communications Infrastructure Summit on Aug. 30 in Chicago, and the
2017 Citi Global Technology Conference on Sept. 7 in New York
City.
Second-Quarter Conference Call
Information
The company will host a second-quarter conference call on
Wednesday, July 26, at 8:30 a.m. EDT. To participate, please call
toll free (800) 230-1074 or for international access call (612)
288-0329 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 "Events" and follow the
instructions. A replay will be available beginning at 11 a.m. EDT
and will run through 5 p.m. EDT, Wednesday, August 9, 2017. To
listen, dial (800) 475-6701 or for international access dial (320)
365-3844. The access code is 426629. 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 the Investor Relations page
and clicking "Financial Highlights" under the "Performance" tab.
These reconciliations also accompany this news release.
Caution Concerning
Forward-Looking Statements
This press release contains "forward-looking statements" - that is,
statements related to future events that by their nature address
matters that are, to different degrees, uncertain. These
forward-looking statements relate to, among other things, the
company's future operating performance, the company's share of new
and existing markets, the company's revenue and earnings growth
rates, the company's ability to innovate and commercialize new
products, and the company's implementation of cost-reduction
initiatives and measures to improve pricing, including the
optimization of the company's manufacturing capacity.
In this context, forward-looking statements often
contain words such as "will," "believe," "anticipate," "expect,"
"intend," "plan," "seek," "see," "would," and "target". Although
the company believes that these forward-looking statements are
based upon reasonable assumptions regarding, among other things,
current estimates and forecasts, general economic conditions, its
knowledge of its business, and key performance indicators that
impact the company, actual results could differ materially. The
company does not undertake to update forward-looking statements.
Some of the risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed in or
implied by the forward-looking statements include, but are not
limited to: competitive products and pricing; availability and
costs of critical components and materials; new product development
and commercialization; order activity and demand from major
customers; unanticipated disruption to equipment, facilities, or
operations; facility expansions and new plant start-up costs; our
ability to pace capital spending to anticipated levels of customer
demand; the amount and timing of our cash flows and earnings and
other conditions, which may affect our ability to pay our quarterly
dividend at the planned level or to repurchase shares at planned
levels; our capital allocation plans, as such plans may change
including with respect to the timing and size of share repurchases,
acquisitions, joint ventures, dispositions and other strategic
actions; and the effectiveness of our risk management
framework.
For a complete listing of risks and other factors,
please reference the risk factors and forward-looking statements
described in the annual reports on Form 10-K and quarterly reports
on Form 10-Q.
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, with a 166-year track record of life-changing
inventions. Corning applies its unparalleled expertise in glass
science, ceramics science, and optical physics along with its deep
manufacturing and engineering capabilities to develop
category-defining products that transform industries and enhance
people's lives. Corning succeeds through sustained investment in
RD&E, a unique combination of material and process innovation,
and deep, trust-based relationships with customers who are global
leaders in their industries.
Corning's capabilities are versatile and synergistic, which allows
the company to evolve to meet changing market needs, while also
helping our customers capture new opportunities in dynamic
industries. Today, Corning's markets include optical
communications, mobile consumer electronics, display technology,
automotive, and life sciences vessels. Corning's industry-leading
products include damage-resistant cover glass for mobile devices;
precision glass for advanced displays; optical fiber, wireless
technologies, and connectivity solutions for state-of-the-art
communications networks; trusted products to accelerate drug
discovery and delivery; and clean-air technologies for cars and
trucks.
Media Relations
Contact:
Daniel Collins
(607)
974-4197
collinsdf@corning.com
Investor Relations Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Q2 2017 PR Financials
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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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