Achieved 11% annual sales growth and advanced leadership
position in all businesses;
Continued growth expected in 2019
and beyond
CORNING, N.Y.; JANUARY 29, 2019- Corning Incorporated (NYSE: GLW)
today announced results for fourth-quarter and full-year 2018.
News Summary:
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Strong fourth quarter, including year-over-year
sales growth in all businesses, finished an excellent 2018
-
Full-year GAAP sales of $11.3 billion, and
full-year GAAP EPS of $1.13; Q4 GAAP sales of $3.0 billion, and Q4
GAAP EPS of $0.32
-
2018 core sales of $11.4 billion, and core EPS
of $1.78, both up 11%
-
Fourth-quarter core sales of $3.1 billion, up
15% year over year, and core EPS of $0.59, up 28% year over
year
-
All businesses delivered full-year sales growth
powered by adoption of innovations and strategic growth
investments
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Optical Communications full-year sales growth of
18% for second consecutive year puts business on pace to exceed
goal of $5 billion in 2020 sales, with continued growth
beyond
-
Specialty Materials full-year sales growth of 5%
follows exceptional 2017 growth of 25%, driven by adoption of
latest Corning innovations
-
Environmental Technologies full-year sales
growth accelerated to 17%, driven by adoption of gasoline
particulate filters (GPF)
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Display Technologies sales grew 4% as the
company ramped its new Gen 10.5 facility and reached important
milestone of mid-single-digit percentage year-over-year price
declines in the second half
-
Life Sciences full-year sales were up 8%, as the
business continued to outpace market growth
-
Significant progress on Strategy and Capital
Allocation Framework
-
Company achieved key milestones in all five
market-access platforms, including customer and platform wins, as
well as new product and market development advancements
-
Since the Framework began, returned $11.8
billion to shareholders on path to return more than $12.5 billion,
and increased dividends per share 50%
-
Company expects continued growth in 2019 and
beyond, driven by benefits from its investments as well as adoption
of technologies well-aligned to key industry trends and Corning's
cohesive portfolio
"For the past three years, we have invested for
growth through our Strategy and Capital Allocation Framework," said
Wendell P. Weeks, chairman, chief executive officer and president.
"The significant benefits of these investments are evident in our
financial performance. In 2018, we built new capacity, launched new
products, grew sales by more than $1 billion, and extended our
leadership position in all businesses. We exited the year with
strong execution, expanded margins, and great momentum.
"We expect our momentum to continue with
additional growth in 2019 as we successfully deliver our Strategy
and Capital Allocation Framework objectives," he added.
Strategy and Capital Allocation
Framework Progress
The Framework outlines the company's 2016-2019
leadership priorities. Under the Framework, Corning plans to
deliver more than $12.5 billion to shareholders while investing $10
billion in growth opportunities. Since it was announced in October
2015, the company has achieved key milestones including the return
of $11.8 billion to shareholders through dividends, which have
increased 50%, and share repurchases, which have reduced
outstanding shares by 36%.
"As we enter the final year under the
Framework, the strategic and financial benefits of Corning's
cohesive portfolio are clear," Weeks said. "We're especially
pleased with the significant achievements across our market-access
platforms."
Highlights of progress in Corning's market-access
platforms include:
- Optical Communications: Secured contracts with
industry leaders in the carrier and data center segments that will
add significant sales in 2019 and beyond, and expanded market
access through the acquisition of 3M's Communication Markets
Division;
- Mobile Consumer Electronics: Extended the
company's leadership with the launch and adoption of
Corning®
Gorilla® Glass 6 as
well as other cover glass and sensing technology innovations;
- Automotive: Gained significant new sales and
platform wins for gasoline particulate filters; increased pull for
Gorilla Glass for Automotive solutions, particularly the industry's
first AutoGrade(TM) Glass Solutions for automotive interiors,
reaching more than 55 platforms to date;
- Life Sciences Vessels: Increased shipments of
Corning Valor® Glass
fourfold year over year, indicating progress toward certification
across more pharmaceutical companies;
- Display: Reached stable returns as the glass
pricing environment continued to improve and Corning extended its
global leadership by establishing the world's first Gen 10.5
manufacturing facility.
Fourth-Quarter and Full-Year 2018
Results and Comparisons
(In millions, except per-share amounts)
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Q4 2018 |
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Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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Full-
year 2017 |
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%
change |
GAAP Net Sales |
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$ |
3,035 |
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$ |
3,008 |
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1% |
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$ |
2,637 |
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15% |
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$ |
11,290 |
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$ |
10,116 |
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12% |
GAAP Net Income (Loss) |
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$ |
292 |
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$ |
625 |
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(53%) |
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$ |
(1,412) |
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NM |
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$ |
1,066 |
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$ |
(497) |
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NM |
GAAP Diluted EPS |
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$ |
0.32 |
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$ |
0.67 |
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(52%) |
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$ |
(1.66) |
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NM |
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$ |
1.13 |
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$ |
(0.66) |
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NM |
Core Sales* |
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$ |
3,081 |
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$ |
3,045 |
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1% |
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$ |
2,675 |
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15% |
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$ |
11,398 |
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$ |
10,258 |
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11% |
Core Earnings* |
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$ |
539 |
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$ |
476 |
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13% |
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$ |
455 |
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18% |
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$ |
1,673 |
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$ |
1,634 |
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2% |
Core EPS* |
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$ |
0.59 |
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$ |
0.51 |
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16% |
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$ |
0.46 |
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28% |
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$ |
1.78 |
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$ |
1.60 |
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11% |
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NM - Not Meaningful
Segment Results and
Outlook
"We had another outstanding quarter, and our
full-year results exceeded our expectations," said Tony Tripeny,
executive vice president and chief financial officer. "In 2018, we
did what we said we were going to do, which was to expand our
manufacturing capacity in the first half and begin leveraging those
growth investments in the second half. In 2019, we expect to build
on this momentum and keep growing across all of our
businesses."
Display Technologies:
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Q4 2018 |
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Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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Full-year 2017 |
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%
change |
Segment Net Sales |
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$ |
899 |
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$ |
852 |
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6% |
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$ |
783 |
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15% |
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$ |
3,276 |
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$ |
3,137 |
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4% |
Segment Net Income Before Tax |
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$ |
304 |
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$ |
275 |
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11% |
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$ |
260 |
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17% |
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$ |
1,056 |
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$ |
1,122 |
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(6%) |
Segment Net Income |
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$ |
240 |
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$ |
218 |
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10% |
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$ |
206 |
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17% |
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$ |
835 |
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$ |
888 |
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(6%) |
Full-year sales in Display Technologies were $3.3
billion, and net income was $835 million. During 2018, Corning
extended its global leadership by successfully ramping Gen 10.5
production, which allowed the company to grow volume faster than
the overall market. Pricing improved as anticipated to a
mid-single-digit percentage decline year over year in both the
third and fourth quarters of 2018.
Fourth-quarter sales were $899 million, and net
income was $240 million. In the fourth quarter, display glass
market volume grew by a low-single-digit percentage sequentially
and Corning's volume grew more.
For full-year 2019, Corning expects display glass market volume to
grow by a mid-single digit percentage. The company expects its
volume to grow more than the market, resulting from the ramp of its
Gen 10.5 facility during 2018. Annual Display glass price declines
are expected to be a mid-single-digit percentage, an improvement
over 2018.
In the first quarter, price declines are expected to remain
moderate and be the most favorable first-quarter price change in
over a decade. Volume is expected to be down by a mid-single digit
percentage sequentially, consistent with the market, which
typically declines in the first quarter.
Optical Communications:
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Q4 2018 |
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Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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Full-year 2017 |
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%
change |
Segment Net Sales |
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$ |
1,166 |
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$ |
1,117 |
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4% |
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$ |
928 |
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26% |
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$ |
4,192 |
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$ |
3,545 |
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18% |
Segment Net Income Before Tax |
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$ |
217 |
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$ |
214 |
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1% |
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$ |
126 |
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72% |
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$ |
777 |
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$ |
596 |
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30% |
Segment Net Income |
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$ |
165 |
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$ |
168 |
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(2%) |
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$ |
99 |
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67% |
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$ |
592 |
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$ |
469 |
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26% |
Optical Communications full-year sales were $4.2 billion, up 18%
for the second consecutive year. The business is on track to
surpass its goal of $5 billion in 2020 sales. Net income was up 26%
year over year. Fourth-quarter sales exceeded $1 billion for the
third consecutive quarter and were up 26% year over year. Net
income for the quarter rose 67% over 2017.
The company expects another year of growth in
Optical Communications in 2019. Specifically, full-year sales
are expected to be up by a low-teens percentage, with first-quarter
sales up in the low-20 percent range year over
year.
Environmental
Technologies:
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Q4 2018 |
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Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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Full-year 2017 |
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%
change |
Segment Net Sales |
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$ |
319 |
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$ |
331 |
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(4%) |
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$ |
291 |
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10% |
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$ |
1,289 |
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$ |
1,106 |
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17% |
Segment Net Income Before Tax |
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$ |
53 |
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$ |
76 |
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(30%) |
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$ |
54 |
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(2%) |
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$ |
263 |
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$ |
209 |
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26% |
Segment Net Income |
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$ |
42 |
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$ |
60 |
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(30%) |
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$ |
43 |
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(2%) |
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$ |
208 |
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$ |
165 |
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26% |
Environmental Technologies 2018 sales were $1.3
billion, up 17% year over year, driven by growth in all product
categories and emerging sales of GPFs. Net income grew faster than
sales at 26% year over year. Fourth-quarter sales grew 10% year
over year.
For 2019, Environmental sales are expected to
increase by a mid-single-digit percentage in the first quarter and
by a high-single-digit percentage for the full year.
Specialty Materials:
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Q4 2018 |
|
Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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Full-year 2017 |
|
%
change |
Segment Net Sales |
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$ |
399 |
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$ |
459 |
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(13%) |
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$ |
393 |
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2% |
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$ |
1,479 |
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$ |
1,403 |
|
5% |
Segment Net Income Before Tax |
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$ |
110 |
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$ |
147 |
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(25%) |
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$ |
111 |
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(1%) |
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$ |
396 |
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$ |
380 |
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4% |
Segment Net Income |
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$ |
87 |
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$ |
116 |
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(25%) |
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$ |
88 |
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(1%) |
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$ |
313 |
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$ |
301 |
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4% |
Specialty Materials 2018 sales were in line with
expectations, after an exceptionally strong year of 25% sales
growth in 2017. Full-year sales rose 5% as OEMs continued to adopt
glass backs and Corning's portfolio of premium glass products.
Fourth-quarter sales were $399 million, up 2% versus the fourth
quarter of 2017.
The company expects year-over-year sales growth
for Specialty Materials in 2019, with the rate and pace dependent
on customer adoption of Corning's innovations. First-quarter sales
are expected to increase by a mid-to high-single-digit percentage
year over year.
Life Sciences:
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Q4 2018 |
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Q3 2018 |
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%
change |
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Q4 2017 |
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%
change |
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Full-year 2018 |
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|
Full-year 2017 |
|
%
change |
Segment Net Sales |
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$ |
238 |
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$ |
231 |
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3% |
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$ |
225 |
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6% |
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$ |
946 |
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$ |
879 |
|
8% |
Segment Net Income Before Tax |
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$ |
37 |
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$ |
38 |
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(3%) |
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$ |
30 |
|
23% |
|
$ |
148 |
|
$ |
120 |
|
23% |
Segment Net Income |
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$ |
29 |
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$ |
30 |
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(3%) |
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$ |
24 |
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21% |
|
$ |
117 |
|
$ |
95 |
|
23% |
In Life Sciences, full-year 2018 sales were up 8%,
with strong fourth-quarter sales, as the business continued to
outpace market growth. For the full year and first quarter of 2019,
sales are expected to grow by a low- to mid-single-digit
percentage.
Upcoming Investor
Events
On Feb. 12, Corning will attend the Goldman Sachs Technology and
Internet Conference to be held in San Francisco. Corning plans to
host its 2019 investor meeting on Friday, June 14 at The Conrad,
102 North End Avenue, New York.
Fourth-Quarter Conference Call
Information
The company will host a fourth-quarter conference call on Tuesday,
Jan. 29, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1074 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
http://www.corning.com/investor_relations, click "Events" and
follow the instructions.
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 Corning's
investor relations website at investor.corning.com, by clicking
"Quarterly Results" under the "Financials" tab. These
reconciliations also accompany this news release.
Caution Concerning
Forward-Looking 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 effects of acquisitions, dispositions and other
similar transactions by the Company, the effect of global business,
financial, economic and political conditions; tariffs and import
duties; currency fluctuations between the U.S. dollar and other
currencies, primarily the Japanese yen, New Taiwan dollar, euro,
Chinese yuan, and South Korean won; product demand and industry
capacity; competitive products and pricing; availability and costs
of critical components and materials; 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; possible disruption in commercial activities due to
terrorist activity, cyber-attack, armed conflict, political or
financial instability, natural disasters, or major health concerns;
unanticipated disruption to equipment, facilities, IT systems or
operations; effect of regulatory and legal developments; ability to
pace capital spending to anticipated levels of customer demand;
rate of technology change; ability to enforce patents and protect
intellectual property and trade secrets; adverse litigation;
product and components performance issues; retention of key
personnel; customer ability, most notably in the Display
Technologies segment, to maintain profitable operations and obtain
financing to fund their ongoing operations and manufacturing
expansions and pay their receivables when due; loss of significant
customers; changes in tax laws and regulations including the Tax
Cuts and Jobs Act of 2017; and the potential impact of legislation,
government regulations, and other government action and
investigations.
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. 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.
Web 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 uses 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, 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
Incorporated
Corning (www.corning.com) is one of the world's leading innovators
in materials science, with a more than 165-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 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:
M. Elizabeth
Dann
(607)
974-4989
dannme@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Q4 2018 Earnings Release
Financials
This
announcement is distributed by West Corporation on behalf of West
Corporation 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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