Strategy and Capital Allocation Framework continues to
deliver value to shareholders
CORNING, N.Y.; OCTOBER 24, 2017 - Corning
Incorporated (NYSE: GLW) today announced results for third-quarter
2017.
News Summary:
- Third-quarter
results reflect continued success of the Strategy and Capital
Allocation Framework: Year-over-year GAAP and core sales up 4% and
6%, to $2.6 billion and $2.7 billion, respectively; GAAP and core
EPS were $0.39 and $0.43 respectively for the third quarter, both
up year over year
- Strong
business-segment performance highlighted by year-over-year sales
increases of 15% in Optical Communications and 26% in Specialty
Materials; sales in all business segments ahead of management
expectations
- Ongoing
progress in focusing the company's portfolio and utilizing its
financial strength to extend leadership, drive growth, and reward
shareholders keeps company on track to deliver Strategy and Capital
Allocation Framework goals
- Returned
$8.5 billion to shareholders since October 2015 while
investing for sustained leadership and growth
- Reached
milestone of 1 billion kilometers of optical fiber sales; shipped
first commercial sales of gasoline particulate filters (GPFs);
strong adoption of Corning®
Gorilla® Glass
innovations
"We had an excellent third quarter," Wendell P.
Weeks, chairman, chief executive officer and president, said. "We
are outperforming on sales, seeing the first returns on near-term
growth investments, and making great progress on our longer-term
growth initiatives. We expect to maintain this momentum and fully
achieve our Strategy and Capital Allocation Framework goals."
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 continued to make significant progress on its goals to
return more than $12.5 billion to shareholders, and to invest
approximately $10 billion in growth and sustained leadership.
"In addition to articulating our capital
allocation goals, our Framework outlines how we utilize our focused
and cohesive portfolio to generate value," said Weeks. "Optical
Communications provides a great example. We combine our three core
technologies and four manufacturing and engineering platforms to
deliver unique solutions. As a result, we are growing at more than
twice the rate of the telecommunications industry, with global
leaders turning to us in support of their visions.
"During the quarter we achieved an exciting
milestone - 1 billion fiber kilometers sold. We see this as a true
measure of success in leveraging our portfolio for more than 40
years to lead the world in optical communications," Weeks
continued. "And, as optical solutions penetrate further into the
network, we are investing because we know that the opportunities
ahead of us are even greater than those behind us."
Other third-quarter progress included: strong
adoption of our Gorilla Glass innovations; first commercial sales
of gasoline particulate filters; continued adoption of Gorilla
Glass for Automotive; and additional traction for Corning Valor(TM)
pharmaceutical glass packaging.
Third-Quarter 2017 Results and
Comparisons (In millions, except per-share amounts)
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
2,607 |
|
$ |
2,497 |
|
4% |
|
$ |
2,507 |
|
4% |
GAAP
Net Income |
|
$ |
390 |
|
$ |
439 |
|
(11%) |
|
$ |
284 |
|
37% |
GAAP
EPS |
|
$ |
0.39 |
|
$ |
0.42 |
|
(7%) |
|
$ |
0.26 |
|
50% |
Core
Sales* |
|
$ |
2,700 |
|
$ |
2,590 |
|
4% |
|
$ |
2,548 |
|
6% |
Core
Earnings* |
|
$ |
433 |
|
$ |
431 |
|
0% |
|
$ |
466 |
|
(7%) |
Core EPS* |
|
$ |
0.43 |
|
$ |
0.42 |
|
2% |
|
$ |
0.42 |
|
2% |
*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 South 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 foreign currencies 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
768 |
|
$ |
748 |
|
3% |
|
$ |
902 |
|
(15%) |
GAAP
Net Income |
|
$ |
203 |
|
$ |
211 |
|
(4%) |
|
$ |
279 |
|
(27%) |
Core
Sales* |
|
$ |
860 |
|
$ |
841 |
|
2% |
|
$ |
943 |
|
(9%) |
Core Earnings* |
|
$ |
227 |
|
$ |
240 |
|
(5%) |
|
$ |
270 |
|
(16%) |
NOTE: In all segments except the
Display Technologies segment, core net sales are consistent with
GAAP net sales. Because a significant portion of sales and costs in
the Display Technologies segment are denominated in Japanese yen
and South Korean won, this segment's net sales and costs are
adjusted to remove the impact of translating yen and won into U.S.
dollars.
In the third quarter, Display Technologies
reported core sales of $860 million and core earnings of $227
million. The LCD glass market and Corning's volume were slightly
better than expected. Sequential LCD glass prices declined
moderately, as expected. For the fourth quarter, the LCD glass
market and Corning volume are expected to be consistent with the
previous quarter, and sequential glass price declines should remain
moderate.
Optical Communications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
917 |
|
$ |
882 |
|
4% |
|
$ |
795 |
|
15% |
GAAP
Net Income |
|
$ |
102 |
|
$ |
101 |
|
1% |
|
$ |
84 |
|
21% |
Core Earnings* |
|
$ |
111 |
|
$ |
108 |
|
3% |
|
$ |
98 |
|
13% |
Optical Communications sales in the third quarter
rose 15% year over year. The increase was driven by strong demand
for both enterprise and carrier products. In the fourth quarter,
the sales growth rate is expected to be a high single digit
percentage on a year-over-year basis.
Environmental
Technologies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
277 |
|
$ |
263 |
|
5% |
|
$ |
264 |
|
5% |
GAAP
Net Income |
|
$ |
34 |
|
$ |
32 |
|
6% |
|
$ |
35 |
|
(3%) |
Core Earnings* |
|
$ |
34 |
|
$ |
32 |
|
6% |
|
$ |
35 |
|
(3%) |
In Environmental Technologies, third-quarter sales
were up 5% year over year, led by worldwide automotive market
growth and additional business wins that allow Corning to grow
faster than the market. For the fourth quarter, the sales growth
rate is expected to be a low-teens percentage compared to the same
period a year ago.
Specialty Materials:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
373 |
|
$ |
337 |
|
11% |
|
$ |
295 |
|
26% |
GAAP
Net Income |
|
$ |
72 |
|
$ |
56 |
|
29% |
|
$ |
42 |
|
71% |
Core Earnings* |
|
$ |
71 |
|
$ |
58 |
|
22% |
|
$ |
44 |
|
61% |
Specialty Materials third-quarter segment sales
rose 26% year over year, led by stronger Gorilla Glass shipments.
For the fourth quarter, the sales growth rate is expected to
increase by a low-to mid-teens percentage from a very strong 2016
fourth quarter.
Life Sciences:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017 |
|
Q2
2017 |
|
%
change |
|
Q3
2016 |
|
%
change |
GAAP
Net Sales |
|
$ |
223 |
|
$ |
221 |
|
1% |
|
$ |
214 |
|
4% |
GAAP
Net Income |
|
$ |
17 |
|
$ |
14 |
|
21% |
|
$ |
16 |
|
6% |
Core Earnings* |
|
$ |
21 |
|
$ |
19 |
|
11% |
|
$ |
21 |
|
- |
In Life Sciences, third-quarter sales rose 4% on a
year-over-year basis. For the fourth quarter, sales are expected to
grow by a mid-single digit percentage on a year-over-year
basis.
Outlook
"Year-to-date achievements and fourth-quarter expectations are
strong. We anticipate that every business segment will meet or beat
the plan we set in January due to strong operating performance and
early sales from our near-term growth investments," said Tony
Tripeny, senior vice president and chief financial officer.
"Additionally, we are capitalizing on trends in
multiple industries that are well aligned with our core
capabilities. These opportunities will drive long-term growth, and
we are investing accordingly," he continued. "We remain on track to
deliver our Framework goals."
Third-Quarter Conference Call
Information
The company will host a third-quarter conference call on Tues.,
Oct. 24, at 8:30 a.m. EDT. To participate, please call toll free
(877) 260-8896 or for international access call (612) 332-0632
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. EST,
Tues., Nov. 7, 2017. To listen, dial (800) 475-6701 or for
international access dial (320) 365-3844. The access code is
430834. 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
Q3 2017 Financial Tables
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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