Corning Incorporated (NYSE: GLW) today announced
its first-quarter 2023 results and provided its outlook for
second-quarter 2023.
First-Quarter 2023 Financial
Performance:
- First-quarter GAAP sales were $3.2 billion, and core sales were
$3.4 billion. Both GAAP and core sales declined 7% sequentially.
- Display Technologies’ sales declined 3% sequentially as both
volume and glass price declined slightly. Volume increased
significantly in March as conditions in China improved and panel
maker utilization resumed its recovery.
- Optical Communications’ sales decreased 6% sequentially as
pricing actions partially offset a greater-than-normal seasonal
volume decline associated with the pacing of customer
projects.
- Environmental Technologies’ sales increased 9% sequentially.
Increased gasoline particulate filter adoption helped drive the
sequential improvement.
- First-quarter GAAP EPS was $0.20. Core EPS was $0.41 versus
$0.47 for the prior quarter. The primary differences between GAAP
and core EPS stemmed from restructuring charges and from non-cash,
mark-to-market adjustments associated with the company’s
currency-hedging contracts and Japanese-yen-denominated debt.
- Core gross margin and core operating margin increased 160 and
150 basis points sequentially to 35.2% and 15.5%, respectively,
despite lower sales, driven by the company’s pricing and
productivity-improvement actions.
- First-quarter free cash flow of $(383) million resulted from
normal cash flow cyclicality and lower sales.
Second-Quarter
2023 Outlook:
- Management expects second-quarter sales, EPS, and cash flow to
increase sequentially, with core sales in the range of $3.4 billion
to $3.6 billion and core EPS in the range of $0.42 to $0.49.
Wendell P. Weeks, chairman and chief executive officer,
said, “Our first-quarter results reflect solid execution
on the priorities we outlined in our last call. We took further
pricing actions to help offset inflation, and we effectively
adjusted our productivity ratios. As a result, profitability
improved despite sequentially lower sales, which were impacted by
recession-level demand in several key markets and overall weakness
in China, as anticipated.”
Weeks continued, “We expect our results to improve in the second
quarter, although conditions remain weak in multiple markets. We
are focused on profitability and cash flow and will continue to
align our cost structure to demand. At the same time, Corning’s
capabilities are vital to our customers’ growth strategies, so we
will move forward on our initiatives to capture upside as it
occurs.”
Ed Schlesinger, executive vice president and chief
financial officer, said, “For the first quarter, we
delivered core sales of $3.4 billion and core EPS of $0.41. Gross
margin was 35.2% and operating margin was 15.5%, demonstrating
meaningful improvements from the fourth quarter. The actions we
took on price and productivity are examples of the strong financial
stewardship we are applying to weather current demand levels and
maintain our long-term trajectory for durable, profitable
growth.”
Schlesinger continued, “For the second quarter, we expect sales,
profitability, and cash generation to increase, driven by our
profit-improvement initiatives and continued recovery in Display
Technologies. Stepping back, we remain confident in our relevance
to long-term secular trends and our ‘More Corning’ approach, and we
are well positioned to capture multiyear sales growth as the global
economy improves.”
Strategy in Action
Corning strives to be a catalyst for positive change and to help
move the world forward. The company drives profitable multiyear
growth by inventing, making, and selling life-changing products
while cultivating deep, trust-based relationships with industry
leaders, ultimately incorporating more content into customers’
offerings. To do so, Corning takes the long view, investing in a
set of vital capabilities that are increasingly relevant to
profound transformations that touch many facets of daily life.
Today, Corning’s markets include optical communications, mobile
consumer electronics, display, automotive, solar, semiconductor,
and life sciences.
First-quarter highlights include:
- Helping build a more connected world. In
March, the company opened an optical cable manufacturing campus in
Hickory, North Carolina, to help provide U.S. network operators
with the cable they need to accelerate the buildouts of high-speed
fiber broadband networks to underserved communities, particularly
in rural America. Corning was joined by Commerce Secretary Gina
Raimondo, who said, "It is past time that every American be
connected with affordable internet no matter where they live. We
could not do it without the folks at Corning. We wouldn’t have the
fiber, the innovation, the cable. We wouldn’t be able to connect
rural America – all of America."
- Deepening Corning’s role in the global automotive
ecosystem by making vehicles greener and
enabling enhanced experiences for drivers. The
company’s innovations are enabling industry leaders to meet
stringent upcoming EU7 emissions regulations and achieve near-zero
emissions levels. Additionally, Corning is collaborating with LG
Electronics, a global technology and vehicle component solutions
innovator, to advance in-car connectivity. Corning continues to see
growing customer demand for solutions that improve design,
connectivity, and autonomy.
- Delivering smartphone cover
material innovations
that allow people to do more
on mobile devices. During the
quarter, Samsung launched its Galaxy S23 device series, which
features Corning® Gorilla® Glass Victus® 2. Additionally, Corning
continued to advance performance and scale manufacturing of cover
glass for bendable devices.
- Continuing to help the global health care industry
address current and future public health challenges. In
February, West Pharmaceutical announced the expansion of a
collaboration with Corning to provide drug developers with an
integrated, industry-leading packaging solution.
- Developing sustainable practices and
products across its industries.
Environmental Technologies continues to see increased adoption of
its next-generation gasoline particulate filters, extending
Corning’s 50-year track record of leadership in emissions control.
Since rising to the challenge of the U.S. Clean Air Act, Corning
has helped prevent billions of tons of hydrocarbons, nitrogen
oxides, and particulates from polluting the air. And in Optical
Communications, the company introduced pre-engineered connectivity
solutions during the quarter that contribute to greener cloud-based
computing by reducing carbon footprint by up to 55% compared with
traditional solutions.
- Continuing its dedication to all its
stakeholders. During the quarter, the company released its
2022 Sustainability Report and its 2022 Global Diversity, Equity,
and Inclusion Report. In March, Corning was named an ENERGY STAR
Partner of the Year by the U.S. Environmental Protection Agency for
the 10th consecutive year – a distinction only 10 companies have
achieved.
First-Quarter 2023
Results and Comparisons (In millions,
except per-share amounts)
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
GAAP Net Sales |
|
$ |
3,178 |
|
|
$ |
3,406 |
|
|
|
(7 |
%) |
|
$ |
3,680 |
|
|
|
(14 |
%) |
GAAP Net Income (Loss)
(1) |
|
$ |
176 |
|
|
$ |
(36 |
) |
|
|
* |
|
|
$ |
581 |
|
|
|
(70 |
%) |
GAAP EPS |
|
$ |
0.20 |
|
|
$ |
(0.04 |
) |
|
|
* |
|
|
$ |
0.68 |
|
|
|
(71 |
%) |
Core Sales (2) |
|
$ |
3,367 |
|
|
$ |
3,633 |
|
|
|
(7 |
%) |
|
$ |
3,744 |
|
|
|
(10 |
%) |
Core Net Income (2) |
|
$ |
350 |
|
|
$ |
402 |
|
|
|
(13 |
%) |
|
$ |
465 |
|
|
|
(25 |
%) |
Core
EPS (2) |
|
$ |
0.41 |
|
|
$ |
0.47 |
|
|
|
(13 |
%) |
|
$ |
0.54 |
|
|
|
(24 |
%) |
(1) Represents GAAP net income (loss) attributable to Corning
Incorporated.(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.* Not meaningful
Optical Communications
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
1,125 |
|
|
$ |
1,195 |
|
|
|
(6 |
%) |
|
$ |
1,198 |
|
|
|
(6 |
%) |
Net
Income |
|
$ |
159 |
|
|
$ |
130 |
|
|
|
22 |
% |
|
$ |
166 |
|
|
|
(4 |
%) |
In Optical Communications, first-quarter sales were $1.1
billion, down 6% sequentially, reflecting a greater-than-normal
seasonal volume decline associated with the pacing of customer
projects. Net income was $159 million, up 22% sequentially, despite
the decline in sales, primarily driven by pricing and productivity
actions.
Display Technologies
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
763 |
|
|
$ |
783 |
|
|
|
(3 |
%) |
|
$ |
959 |
|
|
|
(20 |
%) |
Net
Income |
|
$ |
160 |
|
|
$ |
171 |
|
|
|
(6 |
%) |
|
$ |
236 |
|
|
|
(32 |
%) |
In Display Technologies, first-quarter sales were $763 million,
down 3% sequentially, as both volume and glass price declined
slightly. Volume increased significantly in March as conditions in
China improved and panel maker utilization resumed its
recovery.
Specialty Materials
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
406 |
|
|
$ |
505 |
|
|
|
(20 |
%) |
|
$ |
493 |
|
|
|
(18 |
%) |
Net
Income |
|
$ |
39 |
|
|
$ |
78 |
|
|
|
(50 |
%) |
|
$ |
75 |
|
|
|
(48 |
%) |
In Specialty Materials, first-quarter sales were $406 million,
down 20% sequentially, consistent with normal seasonality. Net
income was $39 million, down sequentially, due to lower sales.
Environmental Technologies
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
431 |
|
|
$ |
394 |
|
|
|
9 |
% |
|
$ |
409 |
|
|
|
5 |
% |
Net
Income |
|
$ |
82 |
|
|
$ |
69 |
|
|
|
19 |
% |
|
$ |
74 |
|
|
|
11 |
% |
In Environmental Technologies, first-quarter sales were $431
million. Increased gasoline particulate filter adoption helped
drive a 9% sequential improvement in sales. Net income increased
19% sequentially, driven by higher sales and improved
productivity.
Life Sciences
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
256 |
|
|
$ |
294 |
|
|
|
(13 |
%) |
|
$ |
310 |
|
|
|
(17 |
%) |
Net
Income |
|
$ |
9 |
|
|
$ |
31 |
|
|
|
(71 |
%) |
|
$ |
42 |
|
|
|
(79 |
%) |
In Life Sciences, first-quarter sales were $256 million, down
13% sequentially, and first-quarter net income was $9 million.
Hemlock and Emerging Growth Businesses
|
|
Q1 2023 |
|
|
Q4 2022 |
|
|
% change |
|
|
Q1 2022 |
|
|
% change |
|
Net Sales |
|
$ |
386 |
|
|
$ |
462 |
|
|
|
(16 |
%) |
|
$ |
375 |
|
|
|
3 |
% |
Net
Income (Loss) |
|
$ |
16 |
|
|
$ |
4 |
|
|
|
300 |
% |
|
$ |
(8 |
) |
|
|
* |
|
* Not meaningful
In Hemlock and Emerging Growth Businesses, first-quarter sales
were $386 million, down 16% sequentially.
Upcoming Investor EventsOn April 27, Corning
will host its 2023 Annual Meeting of Shareholders. On May 23,
Corning will attend the J.P. Morgan 51st Annual Global Technology,
Media and Communications Conference. On May 31 and June 1, Corning
will attend the Bernstein 39th Annual Strategic Decisions
Conference. And on June 22, Corning will attend the virtual 2023
Fox Advisors Transportation Technology Conference. Corning will
also host management visits to investor offices in select cities.
Visit the company’s Investor Relations’ website for up-to-date
conference information.
First-Quarter Conference Call
InformationThe company will host its first-quarter
conference call on Tuesday, April 25, at 8:30 a.m. EDT. To
participate, individuals may pre-register here prior to the start
of the call. Once the required fields are completed, click
“Register.” A telephone number and personal PIN will be auto
generated and will pop up on screen. Participants will have the
choice to “Dial In” or have the system “Call Me.” A confirmation
email will also be sent with specific dial-in information. To
listen to a live audio webcast of the call, go to the company's
Investor Relations’ events page and follow the instructions.
Presentation of Information in this News
ReleaseThis news release includes non-GAAP financial
measures. 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.
Definitions of these non-GAAP financial measures and
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures can be found on the
company’s website by going to the Investor Relations page and
clicking “Quarterly Results” under the “Financials and Filings”
tab. These reconciliations also accompany this news release.
With respect to the outlook for future periods, it is not
possible to provide reconciliations for these non-GAAP measures
because management does not forecast the movement of foreign
currencies against the U.S. dollar, or other items that do not
reflect ongoing operations, nor does it forecast items
that have not yet occurred or are out of management's control.
As a result, management is unable to provide outlook information on
a GAAP basis.
Caution Concerning Forward-Looking
StatementsThe statements contained in this release and
related comments by management that are not historical facts or
information and contain words such as “will,” “believe,”
“anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,”
and “target” and similar expressions are forward-looking
statements. These forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and include estimates and assumptions related to
economic, competitive and legislative developments. Such statements
relate 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, the
Company's expected capital expenditure and the Company’s
implementation of cost-reduction initiatives and measures to
improve pricing, including the optimization of the Company’s
manufacturing capacity.
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, there can be no assurance that
these forward-looking statements will prove to accurate, as actual
results and future events could differ materially from those
anticipated in such statements. The Company undertakes no
obligation to update forward-looking statements if circumstances or
management’s estimates or opinions should change except as required
by applicable securities laws.
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: global economic trends, competition and geopolitical
risks, or an escalation of sanctions, tariffs or other trade
tensions between the U.S. and China or other countries, and related
impacts on our businesses' global supply chains and strategies;
changes in macroeconomic and market conditions and market
volatility, including developments and volatility arising from the
COVID-19 pandemic, inflation, interest rates, the value of
securities and other financial assets, precious metals, oil,
natural gas and other commodity prices and exchange rates
(particularly between the U.S. dollar and the Japanese yen, new
Taiwan dollar, euro, Chinese yuan and South Korean won), the
availability of government incentives, decreases or sudden
increases of consumer demand, and the impact of such changes and
volatility on our financial position and businesses; the duration
and severity of the COVID-19 pandemic and its impact across our
businesses on demand, personnel, operations, our global supply
chains and stock price; possible disruption in commercial
activities or our supply chain due to terrorist activity,
cyber-attack, armed conflict, political or financial instability,
natural disasters, international trade disputes or major health
concerns; loss of intellectual property due to theft, cyber-attack,
or disruption to our information technology infrastructure; ability
to enforce patents and protect intellectual property and trade
secrets; unanticipated disruption to Corning’s, our suppliers’ and
manufacturers’ supply chain, equipment, facilities, IT systems or
operations; product demand and industry capacity; competitive
products and pricing; availability and costs of critical
components, materials, equipment, natural resources and utilities;
new product development and commercialization; order activity and
demand from major customers; 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; the amount and timing of any
future dividends; the effects of acquisitions, dispositions and
other similar transactions; the effect of regulatory and legal
developments; ability to pace capital spending to anticipated
levels of customer demand; our ability to increase margins through
implementation of operational changes, pricing actions and cost
reduction measures; rate of technology change; adverse litigation;
product and component performance issues; retention of key
personnel; customer ability to maintain profitable operations and
obtain financing to fund ongoing operations and manufacturing
expansions and pay receivables when due; loss of significant
customers; changes in tax laws, regulations and international tax
standards; the impacts of audits by taxing authorities; the
potential impact of legislation, government regulations, and other
government action and investigations; and other risks detailed in
Corning’s SEC filings.
For a complete listing of risks and other factors, please
reference the risk factors and forward-looking statements described
in our annual reports on Form 10-K and quarterly reports on Form
10-Q.
Web DisclosureIn 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 uses its website
(https://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, or
supplemental to information contained in this or other press
releases. 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 IncorporatedCorning
(www.corning.com) is one of the world's leading innovators in
materials science, with a 170-year track record of life-changing
inventions. Corning applies its unparalleled expertise in glass
science, ceramic 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 its customers capture new
opportunities in dynamic industries. Today, Corning's markets
include optical communications, mobile consumer electronics,
display, automotive, solar, semiconductors, and life sciences.
Media Relations Contact:Megan Whittemore(202)
661-4171whittemom@corning.com
Investor Relations Contact:Ann H.S. Nicholson
(607) 974-6716 nicholsoas@corning.com
- Corning_First_Quarter_2023_Earnings_FINAL
- Corning Q1 2023 Earnings Release Financials
- Corning 2023_Q1_IR_Earnings_Infographic
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