Corning Incorporated (NYSE: GLW) today announced results for the
third quarter ended Sept. 30, 2021, and provided its outlook for
the fourth quarter.
- GAAP and core sales were $3.6 billion; core sales grew 4%
sequentially and 21% year over year, driven by strong growth in
Optical Communications; GAAP net income was $371 million, and core
net income was $485 million.
- GAAP EPS was $0.43 and core EPS was $0.56; core EPS increased
6% sequentially and 30% year over year.
- Lower production levels in the automotive industry due to the
semiconductor chip shortage reduced sales by approximately $40
million and EPS by $0.02.
- Gross margin expanded 50 basis points sequentially and 70 basis
points year over year to 38.3% despite a net impact of 150 basis
points from supply chain challenges and inflationary
headwinds.
- Free cash flow was $497 million for the quarter and $1.3
billion for the first nine months of 2021.
- For the fourth quarter, Corning expects core sales to be in the
range of $3.5 billion to $3.7 billion with core EPS in the range of
$0.50 to $0.55. Profitability is expected to decline slightly on a
sequential basis due to further reductions in automotive
industry-related sales and lower Corning® Gorilla® Glass sales
following large product launches by customers.
Wendell P. Weeks, chairman and chief executive officer, said,
“Strong execution resulted in another outstanding quarter as sales
reached an all-time high. For the full year, we are on pace to
reach $14 billion in sales and over $2 in EPS. We are successfully
capturing a compelling set of long-term growth opportunities by
innovating, extending commercial relationships, and scaling
operations to meet robust demand. We are advancing our market
leadership and expect to grow again in 2022.”
Weeks continued, “Corning has become increasingly vital to
multiple industry transformations that are moving the world
forward. Key trends continue to converge around our capabilities –
and we believe this is just the beginning. Corning’s strong
position reflects the contributions of our dedicated people as we
navigate this period of global disruption.”
Tony Tripeny, executive vice president and chief financial
officer, said, “In the third quarter, we continued to execute well
in a complex environment. A key driver of that execution was our
global supply management and operations teams maintaining a steady
supply of raw materials and finding creative shipping strategies.
Their actions enabled us to deliver effectively for our customers.
At the same time, we incurred additional costs that were elevated
by inflation. To help offset these costs, we have price increases
underway in all of our businesses.”
Tripeny concluded, “As we approach 2022, we remain focused on
driving top-line growth and expanding our margins. We are well
positioned to address growing customer demand, deepen our
innovation portfolio, and reward shareholders.”
Market-Access Platform Highlights
During the quarter, Corning continued to build on partnerships
with industry leaders such as AT&T, Jeep, PPG, and Samsung and
advanced important growth initiatives across its Market-Access
Platforms.
- Optical
Communications – Demand on networks is at an all-time
high, setting the stage for significant investments by operators to
expand network capacity, capability, and access. During the
quarter, the company announced a collaboration with AT&T.
Corning’s capacity expansions will allow AT&T to extend
investments in fiber infrastructure, expand U.S. broadband
networks, and accelerate 5G deployment. Corning continues to
outperform the market.
- Life Sciences –
Corning continues to support the pandemic response, and its
portfolio of advanced vials and pharmaceutical glass tubing has
enabled the delivery of more than 3 billion doses of COVID-19
vaccines so far. The company also continues to advance its
pharmaceutical packaging portfolio through key partnerships and a
growing customer base. Additionally, innovations are helping
advance developments in cell- and gene-based therapies, which offer
a significant opportunity to increase Corning content in life
sciences products.
- Mobile Consumer
Electronics – Corning continues to advance its objective
of delivering more Corning content, and capturing higher revenue,
per device. During the quarter, Samsung introduced its Galaxy Z
Fold3 5G and Galaxy Z Flip3 5G, both featuring Corning® Gorilla®
Glass Victus®. These devices feature Corning® Gorilla® Glass with
DX for device cameras, marking Corning’s entrance into a new
product category. Additionally, nearly 30 new devices – including
smartphones, wearables, and laptops – launched featuring Corning®
Gorilla® Glass.
- Automotive –
Corning is uniquely suited to address global trends toward cleaner,
safer vehicles that enhance the driving experience. Jeep and
Corning announced that a windshield with Corning® Gorilla® Glass is
available as a factory-installed option on the 2021 Jeep® Wrangler
and 2021 Jeep® Gladiator. Environmental Technologies continues to
deliver more Corning content per vehicle; since 2017, the company’s
automotive product sales have increased more than 40% while global
car sales have decreased 20%.
- Display – The
market for large-sized TVs is projected to grow at a double-digit
compound annual growth rate through 2024. Gen 10.5 glass provides
the most economical approach for larger sets, and Corning is well
positioned to meet growing demand as the leader in Gen 10.5. Glass
demand at retail is expected to be up by a high-single digit
percentage in 2022. The company expects the glass pricing
environment to remain favorable in the fourth quarter and in 2022.
Fourth-quarter glass pricing is expected to be consistent with the
third quarter.
Third-Quarter 2021 Results and Comparisons(In
millions, except per-share amounts)
|
|
Q3 2021 |
|
Q2 2021 |
|
% change |
|
|
Q3 2020 |
|
% change |
|
GAAP Net Sales |
|
$ |
3,615 |
|
$ |
3,501 |
|
3 |
% |
|
$ |
3,001 |
|
20 |
% |
GAAP Net Income |
|
$ |
371 |
|
$ |
449 |
|
(17 |
%) |
|
$ |
427 |
|
(13 |
%) |
GAAP EPS |
|
$ |
0.43 |
|
$ |
(0.42 |
) |
** |
|
|
$ |
0.48 |
|
(10 |
%) |
Core Sales* |
|
$ |
3,639 |
|
$ |
3,504 |
|
4 |
% |
|
$ |
3,007 |
|
21 |
% |
Core Net Income* |
|
$ |
485 |
|
$ |
459 |
|
6 |
% |
|
$ |
380 |
|
28 |
% |
Core
EPS* |
|
$ |
0.56 |
|
$ |
0.53 |
|
6 |
% |
|
$ |
0.43 |
|
30 |
% |
*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
Third-Quarter 2021 Segment Results
Display Technologies
|
|
Q3 2021 |
|
Q2 2021 |
|
% change |
|
|
Q3 2020 |
|
% change |
|
Net Sales |
|
$ |
956 |
|
$ |
939 |
|
2 |
% |
|
$ |
827 |
|
16 |
% |
Net Income Before Tax |
|
$ |
311 |
|
$ |
312 |
|
(0 |
%) |
|
$ |
248 |
|
25 |
% |
Net
Income |
|
$ |
247 |
|
$ |
248 |
|
(0 |
%) |
|
$ |
196 |
|
26 |
% |
In Display Technologies, third-quarter sales were $956 million,
up 2% sequentially and 16% year over year. Sequentially, volume was
up slightly and glass prices increased moderately, as expected.
Optical Communications
|
|
Q3 2021 |
|
Q2 2021 |
|
% change |
|
|
Q3 2020 |
|
% change |
|
Net Sales |
|
$ |
1,131 |
|
$ |
1,075 |
|
5 |
% |
|
$ |
909 |
|
24 |
% |
Net Income Before Tax |
|
$ |
177 |
|
$ |
188 |
|
(6 |
%) |
|
$ |
147 |
|
20 |
% |
Net
Income |
|
$ |
139 |
|
$ |
148 |
|
(6 |
%) |
|
$ |
115 |
|
21 |
% |
In Optical Communications, third-quarter sales were $1.13
billion, up 5% sequentially and 24% year over year. 5G, broadband,
and cloud computing continue to drive strong growth across this
segment. Increased raw material and shipping costs significantly
impacted profitability.
Specialty Materials
|
|
Q3 2021 |
|
Q2 2021 |
|
% change |
|
|
Q3 2020 |
|
% change |
|
Net Sales |
|
$ |
556 |
|
$ |
483 |
|
15 |
% |
|
$ |
570 |
|
(2 |
%) |
Net Income Before Tax |
|
$ |
135 |
|
$ |
103 |
|
31 |
% |
|
$ |
184 |
|
(27 |
%) |
Net
Income |
|
$ |
107 |
|
$ |
81 |
|
32 |
% |
|
$ |
146 |
|
(27 |
%) |
In Specialty Materials, third-quarter sales were $556 million,
up 15% sequentially. The company continues to garner significant
demand for its premium cover materials and Advanced Optics
products, driven by ongoing strength in the underlying IT, mobile
device, and semiconductor markets. In the fourth quarter, the
company expects typical volume declines in Gorilla Glass following
builds supporting flagship product launches by customers.
Environmental Technologies
|
|
Q3 2021 |
|
Q2 2021 |
|
% change |
|
|
Q3 2020 |
|
% change |
|
Net Sales |
|
$ |
385 |
|
$ |
407 |
|
(5 |
%) |
|
$ |
379 |
|
2 |
% |
Net Income Before Tax |
|
$ |
76 |
|
$ |
102 |
|
(25 |
%) |
|
$ |
87 |
|
(13 |
%) |
Net
Income |
|
$ |
60 |
|
$ |
81 |
|
(26 |
%) |
|
$ |
69 |
|
(13 |
%) |
In Environmental Technologies, third-quarter sales were $385
million, up 2% year over year, driven by diesel product sales. The
automotive industry was significantly impacted by the semiconductor
chip shortage as OEMs extended shutdowns due to production
constraints, and Corning's automotive sales and profitability were
down as a result. The company expects sales and profit to be
further impacted in the fourth quarter.
Life Sciences
|
|
Q3 2021 |
|
Q2 2021 |
|
|
% change |
|
|
Q3 2020 |
|
% change |
|
Net Sales |
|
$ |
305 |
|
$ |
312 |
|
|
(2 |
%) |
|
$ |
223 |
|
37 |
% |
Net Income Before Tax |
|
$ |
57 |
|
$ |
66 |
|
|
(14 |
%) |
|
$ |
36 |
|
58 |
% |
Net
Income |
|
$ |
45 |
|
$ |
52 |
|
|
(13 |
%) |
|
$ |
28 |
|
61 |
% |
In Life Sciences, third-quarter sales were $305 million, up 37%
year over year, driven by ongoing demand to support the global
pandemic response, continued recovery in academic and
pharmaceutical research labs, and strong demand for bioproduction
vessels and diagnostic-related consumables.
Upcoming Investor EventsOn Nov. 10, Corning
will attend the Baird Virtual Global Industrial Conference. On Dec.
1, Corning will attend the Credit Suisse Annual Technology
Conference. And, on Dec. 7, Corning will attend the Barclays
Virtual Global Technology, Media, and Telecommunications
Conference.
Third-Quarter Conference Call
InformationThe company will host its third-quarter
conference call on Tuesday, Oct. 26, at 8:30 a.m. EDT. To
participate, please call toll-free (877) 710-0209 or for
international access, call (315) 625-3068 approximately 10 to 15
minutes prior to the start of the call. The access code is 483
4419. 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
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.
Caution Concerning Forward-Looking
StatementsThe statements in this release 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, and
the Company’s implementation of cost-reduction initiatives and
measures to improve pricing, including the optimization of the
Company’s manufacturing capacity. These statements are subject to
change and uncertainty which are, in many instances, beyond our
control. There can be no assurance that future developments will be
in accordance with management’s expectations. Actual results could
differ materially from those expected by us, depending on the
outcome of various factors. We do not undertake to update
forward-looking statements.
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, actual results could differ
materially. 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: the duration and severity of the COVID-19
pandemic, and its impact across our businesses on demand,
operations, our global supply chains and stock price; the effects
of acquisitions, dispositions and other similar transactions;
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), including 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), and the
impact of such changes and volatility on our financial position and
businesses; 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 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; unanticipated disruption to our supply chain,
equipment, facilities, IT systems or operations; 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 and other
cost reduction measures; 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 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 and
regulations; the impacts of audits by taxing authorities; and the
potential impact of legislation, government regulations, 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 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
(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, and life sciences.
Media Relations
Contact: Megan
Whittemore (202)
661-4171 whittemom@corning.com
Investor
Relations Contact:Ann H.S. Nicholson (607) 974-6716
nicholsoas@corning.com
- Q3 2021 Earnings Infographic
- Q3 2021 Earnings Release Financials
- Corning Reports Third-Quarter 2021 Results as Sales Reach
All-Time High
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