CORNING, N.Y., February 6,
2015 - Speaking at the company's annual investor meeting
today in New York City, Wendell P. Weeks, Corning Incorporated's
(NYSE: GLW) chairman, chief executive officer, and president, said,
"We have the right strategy in place to build on the momentum
created in 2014 to drive both near- and long-term growth."
2014 Performance
Highlights
Weeks briefly summarized key achievements against the company's
2014 priorities and told investors: "You can count on us to do what
we say we're going to do."
-
Corning continued its positive momentum in
Display Technologies by achieving critical milestones, including
stable market share, moderate price declines, and a strengthened
position in the high-performance display market.
-
The integration of Corning Precision Materials
Co., Ltd. exceeded the company's original plan by realizing more
than $100 million in pretax synergies last year. Weeks told
investors that Corning expects to continue capturing benefits
sooner than the original plan and now anticipates a total of $630
million in pretax synergies over the 2014-2017 period.
-
Multiple businesses drove Corning's core sales
and profit growth. While the Display Technologies segment continued
to perform as a "profit and cash-generation powerhouse," Corning's
four other segments combined to deliver strong core sales and
earnings growth. Optical Communications and Environmental
Technologies segments were particularly strong 2014 core earnings
drivers, up 18% and 44% respectively.
-
Corning delivered on its commitment to grow core
earnings and return cash to shareholders. In reviewing Corning's
strong sales performance, Weeks remarked, "We've grown sales faster
than our competitors, and we've outperformed them even more in
terms of profit growth." Addressing shareholder value, he added,
"Since October 2011, we have increased Corning's dividend 140% and
repurchased approximately 12% of outstanding shares on a fully
diluted basis."
2015 Priorities
Weeks and other Corning leaders outlined a clear set of priorities
to drive the company's continued success. "Our 2015 priorities are
to sustain positive momentum in all of our businesses; leverage our
innovation engine to drive both near- and long-term growth;
continue to grow sales and core earnings; and extend our commitment
to return cash to shareholders," said Weeks.
Leveraging Innovation to Drive Growth
Weeks described Corning's commitment to innovation as "unwavering"
and explained that the company manages its investment in research,
development, and engineering to capture growth in today's
businesses while creating tomorrow's businesses. He shared examples
of several innovation programs that are driving both near-term and
long-term growth.
Innovations for today's businesses include: the
recently launched Corning®
Gorilla® Glass 4 and
new developments in scratch-resistance capabilities for cover
glass; FLORA(TM) substrate technology for start-up emissions
control; and optical fiber process and materials innovations that
have enabled significant manufacturing cost reduction and more than
four decades of industry leadership.
New business opportunities include Iris(TM) glass,
which enables LED TVs as thin as smartphones by replacing polymer
light-guides with a specialized piece of glass; and Gorilla Glass
automotive laminates, which weigh 30% less than conventional
soda-lime windshields, to help improve fuel economy and meet U.S.
regulations that require automakers to double miles-per-gallon by
2025.
Weeks concluded with remarks about Corning's
sustained investment in research and development. "Corning's
investment in innovation gives us a strong competitive advantage.
On average, we invest in research and development at slightly more
than twice the rate of our peers. That investment provides an
attractive return by supporting greater profitability. Our
operating margin averages 2.5 times our peers. This is a
significant premium enabled by our investment in near- and
long-term opportunities," he noted.
Sustaining Momentum in All
Businesses
James P. Clappin, president of Corning Glass Technologies,
addressed the continued strong profit expectations for his business
group, comprising the Display Technologies and Specialty Materials
segments.
"2015 will be all about large-size LCD TVs,"
Clappin stated. "This segment of the display industry grew more
than 50% year over year on a unit basis in 2014, and our analysis
shows that the average TV screen size is growing more than 1 inch
per year. Importantly, every inch in screen-size growth equates to
about 150 million square feet of additional glass demand."
He noted that this growth comes from three key
drivers: sleeker form factors; superior viewing experience,
particularly from Ultra HD technology; and an affordable upgrade
environment. "The consumer who bought a 40-inch HD TV six years
ago, can now get a
55-inch TV for the same price, with a dramatically improved viewing
experience."
Corning forecasts the display industry's total
glass market will exceed 5 billion square feet by 2016, with
large-size LCD TV viewing area growing more than 30% over this
forecast horizon. As Clappin outlined, Corning is well-positioned
to address this growth opportunity with a competitively advantaged
combination of manufacturing efficiency and capacity; outstanding
product and process innovation; and market leadership.
Clappin noted that the cover glass market is also
expected to grow, powered by the smartphone segment increasing in
both unit volume and screen size. Emerging markets, particularly
China, are integral to this growth.
"Since it was introduced in 2007,
Corning®
Gorilla® Glass has
defined innovation in the cover glass market," Clappin said.
Corning's continued advancements in cover glass technologies
include Gorilla Glass 4 as well as glass material enhancements for
improved scratch-resistance, 3D shaping, and several other surface
capabilities. "We have developed a new product that will provide
sapphire-like scratch resistance while maintaining the legendary
toughness and break resistance of Gorilla Glass," he added.
Eric S. Musser, executive vice president of
Corning Technologies and International discussed Corning's
Environmental Technologies and Life Sciences segments, two
businesses that share a common goal of enabling healthier lives
worldwide.
"Demand for cleaner air worldwide continues to
drive growth for Corning's Environmental Technologies business,"
Musser told investors as he reviewed plans for building on the
record core sales and profitability performance achieved in
2014.
"On a global scale, we expect regulated heavy-duty
vehicles to grow 10% to 15% over the next several years. And,
tighter emissions standards typically mean more of our product per
vehicle is required to reduce those emissions. These advancing
regulations, along with auto production growth of about 3% year
over year, present a positive earnings outlook for our business,"
he said.
Musser highlighted key product innovations that
are expanding Corning's market reach in the emissions control
industry. "In addition to the breakthrough FLORA technology,
designed to activate 20% faster than conventional substrates, we
are excited about the opportunity to develop brand new markets for
our innovations, like filters for gasoline engines," he said. "We
are developing highly effective gasoline particulate filters with
major auto makers who are using gasoline direct injection (GDI)
technology, and we expect to win platforms this year. This could be
a $100 million opportunity for Corning by the end of this
decade."
"We also like the opportunities ahead of us in our
Life Sciences business in which we have the market position,
portfolio, and strategy for growth," Musser continued. "For a full
century now, Corning has been pioneering innovations in drug
discovery, a distinction that affords us a trusted leader position
and a broad customer base, providing stability and growth."
"Virtually every research laboratory in the world
uses our products," Musser noted. "Emerging markets are growing
rapidly, led by China with 8% annual growth. We are well-positioned
to capture opportunities from that growth."
Musser noted Corning's plans for building on its
strength in cell culture innovation. "Drug production is undergoing
a shift from the chemically-based treatments that we've always
known, to new highly effective biologic therapies that are based on
cell culture. This is currently an $8 billion segment, with a 10%
annual growth rate. Our plan is to serve our customers throughout
their entire process, from research to full production."
Clark S. Kinlin, executive vice president of
Optical Communications, reviewed Corning's plan for continued
growth in optical networks.
Kinlin provided investors with a review of data
growth rates and rapidly evolving network dynamics. "The growth of
data and the way we use that data continue to pressure the 'edges'
of the networks worldwide, especially in Fiber-to-the-Home, data
centers and wireless," he said. He noted that the Fiber-to-the Home
market is expected to grow 9% to about $3 billion over the next
five years; the optical data center market is expected to grow 10%
to $1 billion over the next five years, with hyper-scale data
center demand growing faster; and the global distributed antennae
system (DAS) wireless market is expected to grow by about 14%
annually to $1 billion in 2018.
Kinlin told investors that Corning's Optical
Communications segment expects to leverage these market
opportunities and strategic acquisitions for continued growth by
providing optical solutions that solve customers' speed, capacity
and cost challenges. "We expect greater than 10% revenue growth in
the first quarter and high-single-digit growth for 2015," Kinlin
said. "And, we believe that being in the right segments with the
right products - along with exceptional process technology and
operational efficiency - will lead to double-digit profit growth in
2015."
James B. Flaws, vice chairman and chief financial
officer, noted that Dow Corning Corporation, of which Corning is a
50% equity owner, continues its global leadership in both silicone
and polysilicon materials. Corning's 2015 equity earnings from Dow
Corning are expected to be consistent with 2014's strong core
results.
Delivering Value to
Shareholders
Flaws reviewed details of Corning's solid financial position and
expectations for continued growth. In summarizing Corning's outlook
for 2015, he noted that Corning Display Technologies is expected to
deliver core earnings results consistent with 2014 and Corning's
four other business segments, in aggregate, are expected to
increased sales and profitability.
"The bottom line is that 2015 should be another
year of core earnings growth. Our businesses are delivering
additional core earnings, and our lower share count from the
execution of our share repurchase program enables higher earnings
per share," he said.
In concluding the meeting, Flaws added, "We are
entering 2015 with positive momentum in all of our businesses. Our
investment in RD&E is paying off. And, we are delivering
significant value to our shareholders."
Conference Broadcast
Information
Corning's annual investor meeting is being held on Friday, Feb. 6
at Cipriani, located at 55 Wall St., New York. Corning will make
the presentation at its annual investor conference available to the
public through a video and audio webcast and telephone access. The
broadcast will begin at 8:30 a.m. EST. The dial-in number is
877-878-2857 (U.S.) or 678-894-3959 (International). The call title
is Corning Incorporated 2015 Investor Meeting. A replay of the call
will be available at 2 p.m. EST and will run through 5 p.m. EST on
Tuesday, Feb. 10, 2015. To access the replay, dial 855-859-2056 or
800-585-8367 (U.S.) or 404-537-3406 (International). The conference
ID is 77031439. 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.
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
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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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