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Strong Optical Communications performance leads diversified
business growth
CORNING, N.Y., April 28,
2015 - Corning Incorporated (NYSE: GLW) today announced
its results for the first quarter of 2015.
First-Quarter Performance
Highlights
- Core sales were $2.4 billion*, a 4% increase on a
year-over-year basis. Net sales (GAAP) were $2.3 billion,
consistent with the prior year quarter.
- Core earnings per share were $0.35 per share*, an
increase of 21% over the comparable quarter last year. GAAP
earnings per share were $0.29.
- Sales in the Optical Communications segment
increased 18% from the year-ago period, driven by strong demand for
the company's fiber-to-the-home solutions and the addition of sales
from a recent acquisition.
- Sequential LCD glass price declines continued at
moderate levels in the first quarter, and the company expects
prices to decline even less in the second quarter.
- Corning® Gorilla® Glass sales were strong in the
quarter, driven by the success of Gorilla Glass 4.
Quarter-One Financial
Comparisons
In millions, except percentages and per-share amounts
|
Core Performance* |
|
Q1 2015 |
Q1 2014 |
% Change |
Core Net Sales |
$2,430 |
$2,326 |
4% |
Core Earnings |
$484 |
$423 |
14% |
Core Earnings EPS |
$0.35 |
$0.29 |
21% |
|
GAAP |
|
Q1 2015 |
Q1 2014 |
% Change |
Net Sales |
$2,265 |
$2,289 |
(1)% |
Net Income |
$407 |
$301 |
35% |
EPS |
$0.29 |
$0.20 |
45% |
*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
website. Additional non-GAAP reconciliations for the years 2013 and
2014 have been provided on our website, and they detail the change
in core gross margin, core selling, general and administrative
expenses, and core research, development, and engineering expenses
due to the change in Corning's constant-Japanese yen rate from ¥93
to ¥99 beginning in the first quarter of 2015. Core performance
metrics (non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen foreign exchange rate, as well as other items that do
not reflect ongoing operations of the company. See "Use of Non-GAAP
Financial Measures" section of attached Form 8-K for details on
core performance measures.
"We are off to an excellent start in 2015,"
Wendell P. Weeks, chairman, chief executive officer and president,
said. "In the first quarter, we benefited from the company's
business diversity with core sales growing in four of five
segments.
"Our Optical Communications segment had a terrific
quarter as demand for fiber-to-the-home solutions and data center
products remained strong. In our Display Technologies segment,
moderate LCD glass price declines and a relentless focus on cost
reductions have helped us maintain profitability. Finally, our
latest generation of Gorilla Glass is a hit with customers, and its
success is helping to drive operational results."
Weeks said, "We believe we are on track for
another year of core earnings growth."
First-Quarter Segment
Results
Display Technologies segment core sales were $972 million*, up
slightly from last year's first quarter. Core earnings for the
quarter were $294 million*, a 4% increase on a year-over-year
basis. Total LCD glass volume grew at a high-teen percentage on a
year-over-year basis. Sequential LCD price declines were moderate,
as expected. The combination of increased volume, slower price
declines, and cost reductions drove a year-over-year improvement in
the segment's gross margin percent.
Optical Communications segment sales were $697
million, an 18% increase compared with $593 million in the first
quarter last year with growth in both carrier and enterprise
networks sales. The results exceeded the company's expectations for
the quarter, driven by strong fiber-to-the-home demand in North
America. The recent acquisition of TR Manufacturing, Inc. also
contributed to sales growth in the quarter. Core earnings for the
quarter were $72 million*, an increase of 85% from a year ago.
Environmental Technologies segment sales were $282
million, a slight increase compared with $275 million in quarter
one 2014. Core earnings were $48 million*, a 12% increase from a
year ago. Increased demand for Corning's heavy-duty diesel
emissions products drove the bulk of the quarterly sales increase
and improved profitability.
Sales in Corning's Specialty Materials segment
were $272 million, a 4% increase from last year's first-quarter
results. Gorilla Glass volume was up greater than 20%, as expected,
driven by increasing demand for Gorilla Glass 4 cover glass. A
decline in advanced optics sales partially offset the strength in
Gorilla Glass in the segment's results. Core earnings of $46
million* were up 44% versus last year.
Life Sciences segment sales were $197 million in
the quarter. Core equity earnings from Dow Corning Corporation
declined by 14%, the result of lower-than-expected sales of
polysilicon.
Core gross margin for the quarter was 44%*, a 1%
increase over the year-ago period and better than company
expectations.
In the first quarter, Corning repurchased 21
million shares of common stock for approximately $500 million as
part of its previously announced $1.5 billon share repurchase
program.
Corning ended the first quarter with $5.1 billion
in cash and short-term investments.
Looking Forward
"Our excellent first-quarter results have given us momentum for
continued growth in the second quarter," James B. Flaws, vice
chairman and chief financial officer, said. "Strong demand for our
optical communications products, the popularity of Gorilla Glass
and strength of our heavy-duty diesel emissions materials will
drive our second-quarter performance," he said.
In the second quarter, Corning expects its LCD
glass volume to increase by a low single-digit percentage
sequentially. Glass prices in the quarter are expected to decline
even less than the first quarter.
Optical Communications segment second-quarter
sales on a year-over-year basis are expected to increase by a
mid-teen percentage as demand from carrier and enterprise networks
remains strong. Recent acquisitions will also contribute to strong
performance.
In Environmental Technologies, second-quarter
sales are anticipated to decrease by a mid-single digit percentage
on a year-over-year basis. The company expects demand for its
emissions control products to be consistent with last year. A
weaker Euro exchange rate will impact year-over-year sales
comparisons.
Specialty Materials segment sales in the second
quarter are expected to decrease by a mid-single digit percentage
on a year-over-year basis, driven by declines in advanced optics
product sales. Gorilla Glass sales are expected to remain strong.
Life Sciences segment sales are projected to be down slightly
year-over-year, driven by the impact of the weaker foreign exchange
rates.
For the full year, Flaws commented, "We anticipate
2015 will be another year of strong core earnings-per-share growth
for Corning. Our performance will be led by our Optical
Communications segment, which is experiencing strong demand and
benefiting from recent acquisitions. Consumer demand for handheld
electronic devices, particularly new smartphone models, will drive
Gorilla Glass 4 glass volume increases during the year. We expect
growth in our Environmental Technologies and Life Sciences segments
as well, but the potential for further weakening of the Euro
exchange rate may negatively affect this growth."
In conclusion, Flaws said, "We exited 2014 with
strong momentum, and our first-quarter performance reinforces
expectations for our 2015 growth."
Upcoming Investor
Events
Corning will host investors in Corning, N.Y., on May 7 and present
at the JP Morgan Technology, Media and Telecom Conference on May 19
in Boston.
First-Quarter Conference Call
Information
The company will host a first-quarter conference call on Tuesday,
April 28, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1096 or for international access call (612) 234-9960
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 and
click "Investor Events" on the left. A replay will be available
beginning at 11 a.m. ET and will run through 5 p.m. ET, Tuesday,
May 12. To listen, dial (800) 475-6701 or for international access
dial (320) 365-3844. The access code is 357164. 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
Q1 Earnings Financials
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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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