Corning Incorporated (NYSE: GLW) today announced results for the
first quarter ended March 31, 2021.
Corning reported a strong first quarter:
- GAAP and core sales were $3.3 billion, year-over-year increases
of 38% and 29%, respectively
- GAAP EPS was $0.67, reflecting strong performance and a
non-cash, mark-to-market gain associated with the company’s
currency-hedging contracts
- Core EPS grew 125% year over year to $0.45
- All segments grew sales and net income by double-digit
percentages year over year
- Environmental Technologies grew sales 38% and net income
111%
- Specialty Materials grew sales 28% and net income 78%
- Optical Communications grew sales 18% and net income 283%
- Life Sciences grew sales 16% and net income 26%
- Display Technologies grew sales 15% and net income 40%
- Free cash flow of $372 million grew $691 million year over year
and equates to 39% of 2020 total
- Profitability was impacted by approximately $50 million due to
elevated freight and logistic costs and global supply chain
disruptions
Wendell P. Weeks, chairman and chief executive officer, said,
“We are off to an outstanding start in 2021. Our success in the
first quarter is yet another proof point that we have built a
stronger, more resilient company. And we’re confident that we can
build on these results to maintain momentum throughout the
year.”
Weeks continued, “Corning is uniquely qualified to address some
of the world’s toughest challenges. Our innovative capabilities put
us at the heart of multiple trends that are reshaping the world.
This provides a powerful source of long-term growth as we drive
more Corning content into the industries we serve.”
Weeks concluded, “We remain steadfast in our commitment to
support our people, customers, and communities by applying the
strength of our products and resources.”
Market-Access Platform Highlights
Corning continues to advance important growth initiatives across
its Market-Access Platforms. Highlights include:
- Automotive – Environmental Technologies
furthered the adoption of its gasoline particulate filter (GPF)
innovations, highlighted by its launch of a new generation of GPFs
that help vehicles, including hybrids, achieve even lower levels of
fine-particulate tailpipe emissions as regulatory limits tighten.
Automotive Glass Solutions is meeting growing demand through its
large-scale facility in Hefei, China, while collaborating with
leading OEMs. Corning is addressing a combined $100-per-car content
opportunity across emissions, technical glass products, and
auto-glass solutions, including patented 3D Corning® ColdForm™
Technology. The world premiere event for the new all-electric EQS
from Mercedes-EQ highlighted its MBUX Hyperscreen – featuring an
almost 5-foot-wide Corning Gorilla Glass for Automotive Interiors
cover.
- Mobile Consumer Electronics – Fast Company
named Corning the most innovative company in the consumer
electronics category for 2021, touting Ceramic Shield as “virtually
indestructible” and recognizing Corning® Gorilla® Glass Victus™,
the most durable Gorilla Glass to date. Demand for these
innovations is strong. During Q1, more than 25 smartphones and 12
laptops launched featuring Gorilla Glasses. Additionally, Advanced
Optics is capturing strong demand for its industry-leading extreme
ultraviolet (EUV) products as semiconductor manufacturing rapidly
adopts EUV technology. In 2020, EUV systems accounted for more than
30% of all semiconductor lithography equipment expenditures. EUV
systems are expected to grow significantly over the next five years
in both absolute dollars and as a share of equipment
expenditures.
- Optical Communications
– Verizon and AT&T – winners in the recent $81 billion
5G spectrum auction that demonstrated the value of using spectrum
efficiently – are collaborating with Corning and investing in their
fiber networks to meet growing customer demand. Corning is
continuing to innovate to reduce the cost and speed the deployment
of 5G, hyperscale data centers, and fiber-to-the-home. Verizon
recently named Corning a leading network partner for 5G radio nodes
in retail and other venue deployments of millimeter-wavelength
systems. And Corning’s fiber optic cable manufacturing facility in
Hickory, North Carolina, is leveraging Verizon 5G Edge with Amazon
Web Services to explore how 5G can reshape manufacturing.
- Life Sciences – New long-term supply
agreements executed in the first quarter support increased
production to meet growing demand in diagnostics, bioproduction,
and lab research. In addition, Corning doubled its vial production
in the first quarter over fourth quarter 2020. Through March 31,
the company has shipped enough Corning Valor® Glass vials for
hundreds of millions of COVID-19 vaccine doses. Corning expanded
its contract with the U.S. government to $261 million, a $57
million increase from the $204 million awarded to Corning in June
2020. The funding is enabling Corning to substantially expand
domestic manufacturing capacity and help accelerate delivery of
COVID-19 vaccines.
- Display – Corning experienced the most
favorable first-quarter pricing environment in more than a decade
and announced a moderate increase to its display glass substrate
prices for the second quarter. Demand for IT products is expected
to grow meaningfully for the second consecutive year, and overall
retail demand for TVs remains high. Demand for large-size TVs
continues to grow – 75-inch sets were up more than 60% in 2020.
These TVs are most efficiently made on the largest fabs, and
Corning is well positioned to drive more content into the market in
2021 with the company’s three Gen 10.5 plants.
Financial Outlook
Tony Tripeny, executive vice president and chief financial
officer, said, “Corning had an excellent quarter. We delivered
sales, EPS, and cash flow above our expectations. We are off to a
great start, and we expect this momentum to continue throughout the
year.”
Tripeny added, “Multiple events disrupted global supply chains
in the first quarter, and we experienced elevated freight and
logistic costs that impacted profitability. We expect that these
costs will normalize longer term and will begin to decline in the
second quarter as we take mitigating actions. We will continue to
do what it takes to deliver for our customers.”
The company reiterated its commitment to financial stewardship
and prudent capital allocation. Corning’s priorities are to
generate strong cash flow and use cash to grow, extend market
leadership, and reward shareholders. In February, Corning announced
a quarterly dividend increase of 9% to $0.24 per share. In April,
Corning resumed share repurchases, buying back 4% of its
outstanding shares from Samsung Display Co., Ltd.
For the second quarter, the company expects core sales to be in
the range of $3.3 billion to $3.5 billion and core EPS in the range
of $0.49 to $0.53. Corning anticipates strong demand and positive
momentum across its businesses to continue throughout 2021.
First-Quarter 2021 Results and
Comparisons(In millions, except per share
amounts)
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
GAAP Net Sales |
|
$ |
3,290 |
|
$ |
3,350 |
|
(2 |
%) |
|
$ |
2,391 |
|
|
38 |
% |
GAAP Net Income (Loss) |
|
$ |
599 |
|
$ |
252 |
|
138 |
% |
|
$ |
(96 |
) |
|
** |
GAAP EPS |
|
$ |
0.67 |
|
$ |
0.28 |
|
139 |
% |
|
$ |
(0.16 |
) |
|
** |
Core Sales* |
|
$ |
3,263 |
|
$ |
3,328 |
|
(2 |
%) |
|
$ |
2,529 |
|
|
29 |
% |
Core Net Income* |
|
$ |
402 |
|
$ |
462 |
|
(13 |
%) |
|
$ |
177 |
|
|
127 |
% |
Core
EPS* |
|
$ |
0.45 |
|
$ |
0.52 |
|
(13 |
%) |
|
$ |
0.20 |
|
|
125 |
% |
*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. The largest difference between our GAAP and core results
stemmed from non-cash, mark-to-market gains associated with the
company’s currency-hedging contracts.**Not Meaningful
First-Quarter 2021 Segment Results
Display Technologies
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
Net Sales |
|
$ |
863 |
|
$ |
841 |
|
3 |
% |
|
$ |
751 |
|
15 |
% |
Net Income Before Tax |
|
$ |
269 |
|
$ |
274 |
|
(2 |
%) |
|
$ |
192 |
|
40 |
% |
Net
Income |
|
$ |
213 |
|
$ |
217 |
|
(2 |
%) |
|
$ |
152 |
|
40 |
% |
In Display Technologies, first-quarter sales were $863 million,
up 3% sequentially and 15% year over year. Corning’s volume grew by
a low-single digit percentage sequentially. Glass prices were
consistent with the fourth quarter. The company announced a
moderate increase to its display glass substrate prices for the
second quarter.
Optical Communications
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
Net Sales |
|
$ |
937 |
|
$ |
976 |
|
(4 |
%) |
|
$ |
791 |
|
18 |
% |
Net Income Before Tax |
|
$ |
142 |
|
$ |
179 |
|
(21 |
%) |
|
$ |
37 |
|
284 |
% |
Net
Income |
|
$ |
111 |
|
$ |
141 |
|
(21 |
%) |
|
$ |
29 |
|
283 |
% |
In Optical Communications, first-quarter sales were $937
million, up 18% year over year. Sales increased in both enterprise
and carrier networks, driven by the accelerated pace of data center
builds, network capacity expansion, and fiber-to-the-home
projects.
Specialty Materials
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
Net Sales |
|
$ |
451 |
|
$ |
545 |
|
(17 |
%) |
|
$ |
352 |
|
28 |
% |
Net Income Before Tax |
|
$ |
115 |
|
$ |
173 |
|
(34 |
%) |
|
$ |
65 |
|
77 |
% |
Net
Income |
|
$ |
91 |
|
$ |
136 |
|
(33 |
%) |
|
$ |
51 |
|
78 |
% |
In Specialty Materials, first-quarter sales of $451 million
increased 28% year over year due to strong demand for premium cover
materials, strength in the IT market, and the growing importance of
semiconductor-related optical glasses.
Environmental Technologies
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
Net Sales |
|
$ |
441 |
|
$ |
445 |
|
(1 |
%) |
|
$ |
320 |
|
38 |
% |
Net Income Before Tax |
|
$ |
94 |
|
$ |
118 |
|
(20 |
%) |
|
$ |
44 |
|
114 |
% |
Net
Income |
|
$ |
74 |
|
$ |
93 |
|
(20 |
%) |
|
$ |
35 |
|
111 |
% |
In Environmental Technologies, first-quarter sales of $441
million increased 38% year over year, driven by improving markets
and more Corning content. Diesel sales grew 44% year over year,
driven by demand in China and North America.
Life Sciences
|
|
Q1 2021 |
|
Q4 2020 |
|
%change |
|
Q1 2020 |
|
%change |
Net Sales |
|
$ |
300 |
|
$ |
274 |
|
9 |
% |
|
$ |
258 |
|
16 |
% |
Net Income Before Tax |
|
$ |
61 |
|
$ |
53 |
|
15 |
% |
|
$ |
48 |
|
27 |
% |
Net
Income |
|
$ |
48 |
|
$ |
42 |
|
14 |
% |
|
$ |
38 |
|
26 |
% |
In Life Sciences, first-quarter sales were $300 million, up 16%
year over year. Performance was driven by strong demand across all
regions, ongoing recovery in academic and pharmaceutical research
labs, and continued strong demand for bioproduction products and
diagnostic-related consumables.
First-Quarter Conference Call InformationThe
company will host a first-quarter conference call on Tuesday, April
27, 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 524 7014. 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
Statements
The statements contained 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 estimates 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. The Company does not undertake to update
forward-looking statements. 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 ultimate impact across
our businesses on demand, operations and our global supply chains;
the effects of acquisitions, dispositions and other similar
transactions; 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; loss of intellectual property
due to theft, cyber-attack, or disruption to our information
technology infrastructure; 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 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; the potential impact of
legislation, government regulations, and 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
(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 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 our 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: Pamela
Porter (607)
974-9980 porterpw@corning.com
Investor
Relations Contact:Ann H.S. Nicholson (607) 974-6716
nicholsoas@corning.com
- Q1 2021 Financial Table
- Q1_Earnings_2021_Infographic_Final
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