3rd consecutive quarter of EPS
growth
LCD glass price declines
moderate further
CORNING, N.Y., July 30,
2013 - Corning Incorporated (NYSE: GLW) today
announced its results for the second quarter of 2013. Performance
highlights included:
-
Core sales were $2.0 billion*, an increase of 11%
over the same period of 2012. Net sales (GAAP) for the quarter were
$2.0 billion.
-
Core earnings per share were $0.32*, representing
a 23% improvement over the second quarter of 2012 and the third
consecutive quarter of year-over-year double-digit growth. GAAP
earnings per share were $0.43, compared with $0.31 a year ago, a
39% increase.
-
In the Display Technologies segment,
second-quarter LCD glass price declines were moderate and less than
the previous quarter.
-
Sales and net income in Corning's
Telecommunications segment improved significantly on both a
year-over-year and sequential basis.
Second-Quarter Financial
Comparisons
In millions, except percentages and per-share amounts
|
Core Performance* |
|
Q2 2013 |
Q2 2012 |
% Change |
Core Net Sales |
$2,021 |
$1,819 |
11% |
Core Equity Earnings |
$173 |
$211 |
(18%) |
Core Earnings |
$469 |
$388 |
21% |
Core Earnings EPS |
$0.32 |
$0.26 |
23% |
|
GAAP |
|
Q2 2013 |
Q2 2012 |
% Change |
Net Sales |
$1,982 |
$1,908 |
4% |
Equity Earnings |
$166 |
$259 |
(36%) |
Net Income |
$638 |
$474 |
35% |
EPS |
$0.43 |
$0.31 |
39% |
*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
investor relations website. Core performance metrics (non-GAAP) are
adjusted to exclude the impact of changes in Japanese yen to U.S.
dollar exchange rate and other yen transactions, equity earnings
from the polysilicon business of Dow Corning Corporation, as well
as other special items. See "Use of Non-GAAP Financial Measures" in
our Form 8-K filed on July 30, 2013, for details on Core
Performance measures.
Remarking on the second quarter, Wendell P. Weeks,
chairman, chief executive officer, and president, said, "In
Corning's strong second quarter, we achieved our third consecutive
period of year-over-year EPS improvement. For the past 18
months, we have effectively managed our cost structure, brought
stability to our LCD glass business, returned to earnings growth,
and advanced our new-product portfolio. We are pleased with the
progress we are making and believe our strategy is working."
Second-Quarter Core
Performance Segment Results
Display Technologies segment core sales were $670 million*, a 21%
increase compared with a year ago, and stronger than originally
anticipated. LCD glass price declines were more moderate than
in the first quarter and were within the range the company
anticipated. Total glass volume from Corning's wholly owned
business and Samsung Corning Precision Materials Co., Ltd.
increased by a mid-single digit percentage sequentially and about
20% on a year-over-year basis. Year-over-year core earnings for the
segment increased approximately 11%.
Telecommunications segment sales were $601
million, an 8% increase from last year's second quarter. The
increase was driven by strength in sales to NBN for its national
broadband build out in Australia, and improved enterprise network
and wireless solutions sales in the quarter. The segment also had
improved manufacturing performance and cost reductions, driving
core earnings growth of around 62%.
As expected, Specialty Materials segment sales
grew 17% sequentially to $301 million, driven by increased sales of
Corning®
Gorilla® Glass.
Segment core earnings grew by approximately 33% over the
previous year on strong Gorilla Glass manufacturing
performance.
Environmental Technologies segment sales were $228
million, representing an 8% year-over-year decline in comparison
with a particularly robust quarter a year ago, when demand for
emissions-control products exceeded manufacturing capacity. Despite
the sales decline, segment core earnings were consistent with a
year ago on strong operational performance.
Life Sciences segment sales increased 35% to $219
million on a year-over-year basis. The sales increase reflects
growth from the acquired Discovery Labware business. Segment core
earnings doubled from a year ago.
Core equity earnings from Dow Corning Corporation
declined 19% on a year-over-year basis, substantially below
Corning's expectations. The primary issue is price pressure in
China and Europe on lower-end silicone products.
Core gross margin in the quarter was 43%*, a
significant improvement over the second quarter of 2012. Corning
ended the quarter with $5.5 billion in cash and short-term
investments. As part of the company's commitment to return
value to its shareholders, Corning repurchased about $242 million
in common stock during the second quarter and increased its
quarterly dividend payment by 11%.
As a reminder, Corning moved to core performance
measures for financial reporting to provide investors a clear view
of the company's core operating results. The core performance
metrics exclude the impact of changes in the
Japanese-yen-to-U.S.-dollar exchange rate; the results of the
polysilicon business of Corning's affiliate, Dow Corning
Corporation; as well as other special items. Corning's core
performance results are now reported on a constant-yen basis. These
core performance measures are non-GAAP financial measures. Starting
this quarter, core performance also excludes the positive impact
from yen-denominated transaction hedges. This change reduced core
EPS about $0.01 in the second quarter for 2013. Reconciliations to
GAAP are available on the company's website.
Looking
Forward
"We believe Corning will continue to have good sales and earnings
growth, driven by our Display Technologies segment's success in
moderating LCD glass price declines; our leadership positions and
strong customer relationships in all of our segments; and growth
from new products," James B. Flaws, vice chairman and chief
financial officer, said.
In the third quarter, Corning expects to achieve
its fourth consecutive quarter of year-over-year earnings growth.
The company also anticipates its LCD glass volume should be
consistent to up slightly compared with the strong second quarter
performance. Corning expects its volumes in the second half to be
driven by global retail TV demand, especially for 50-inch or larger
LCD television models. Third quarter LCD glass price declines are
anticipated to be moderate, and consistent with the previous
quarter.
Specialty Materials segment sales are expected to
improve about 10% sequentially. Yesterday, Corning announced the
introduction of Corning®
Gorilla® Glass
NBT(TM), a specially designed and strengthened cover glass for
touch notebook applications. The company expects sales to begin
ramping for this new product in the third quarter. Industry market
research indicates that touch-enabled notebooks represent the next
wave of opportunity for cover glass technologies.
Telecommunications segment sales in the third
quarter are expected to increase about 20% on a year-over-year
basis. Environmental Technologies segment sales in the third
quarter are expected to be up slightly with those of the same
period a year ago. In the Life Sciences segment, sales are expected
to increase between 40% and 45% on a year-over-year basis.
Core equity earnings from Dow Corning are expected
to be down approximately 50% versus the second quarter due to price
pressure and cost in inventories. The fourth quarter is expected to
be closer to the second quarter earnings level.
"Our strong first-half performance has established
a solid foundation for continued growth. We expect excellent retail
demand for large-size televisions to allow us to continue our
strong LCD glass performance from the first half. We expect sales
in our Telecommunications, Environmental and Life Sciences segments
to grow as well. And we are very excited about the emerging
opportunities for our Gorilla Glass products, especially as
touch-enabled notebooks become available in the consumer market. We
look forward to introducing other advanced technology applications
for Gorilla Glass in the coming months," Flaws concluded.
Upcoming Investor
Events
Corning will present at Citi's 2013 Global Technology Conference on
Wednesday, Sept. 4, 2013, in New York City.
Second-Quarter Conference
Call Information
The company will host a second-quarter conference call on Tuesday,
July 30, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1059 or for international access call (612) 234-9959
approximately 10-15 minutes prior to the start of the call. The
password is 'QUARTER TWO'. 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 Investor Events on the
left. A replay will be available beginning at 10:30 a.m. ET and
will run through 5 p.m. ET, Tuesday, Aug. 13, 2013. To listen, dial
(800) 475-6701 or for international access dial (320) 365-3844. The
access code is 297023. 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 net income and EPS
measures exclude restructuring, impairment and other charges and
adjustments to prior estimates for such charges. Additionally, the
company's non-GAAP measures exclude adjustments to asbestos
settlement reserves, gains and losses arising from debt
retirements, charges or credits arising from adjustments to the
valuation allowance against deferred tax assets, equity method
charges resulting from impairments of equity method investments or
restructuring, impairment or other charges taken by equity method
companies and gains from discontinued operations. The company
believes presenting non-GAAP net income and EPS measures is helpful
to analyze financial performance without the impact of unusual
items that may obscure trends in the company's underlying
performance. Reconciliation of these non-GAAP measures can be found
on the company's website by going to
www.corning.com/investor_relations and clicking Financial Reports
on the left. Reconciliation also accompanies 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 Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 160 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy, and metrology.
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
Q2 2013 Financial Tables
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Corning Incorporated via Thomson Reuters ONE
HUG#1719630
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