Corning Incorporated (NYSE: GLW) today announced first-quarter 2022
results and provided its outlook for second-quarter and full-year
2022.
“We are off to an outstanding start in 2022, driven by
broad-based strength across our businesses – led by 28%
year-over-year sales growth in Optical Communications and continued
favorable pricing in Display. In the first quarter, company sales
grew 15% year over year, with EPS growing even faster at 20%. We
successfully navigated a complex geopolitical and external
operating environment, and our innovations and pricing actions
contributed to improved profitability,” said Wendell P. Weeks,
chairman and chief executive officer.
“Looking ahead, demand for Corning content has never been
greater. We expect strong top- and bottom-line growth this year, as
we advance innovations and remain focused on pricing, capital
efficiency, and cash generation,” Weeks continued.
Financial Highlights:
- GAAP and core sales were $3.7 billion; core sales grew 15% year
over year, driven by strong sales growth in Optical Communications,
Display Technologies, and Hemlock’s solar materials.
- GAAP EPS was $0.68; core EPS was $0.54, an increase of 20% year
over year.
- The primary difference between GAAP and core EPS stemmed from
non-cash, mark-to-market gains associated with the company’s
currency-hedging contracts.
- Core gross margin and core operating margin grew sequentially
and year over year to 36.6% and 17.6%, respectively. The
improvements were primarily driven by benefits of previously
announced pricing actions across all businesses.
- Free cash flow was $171 million for the quarter. The company
continues to expect another year of strong cash generation.
- For the second quarter, Corning expects $3.7 billion to $3.9
billion in core sales with core EPS of $0.54 to $0.59.
- For the full year, management raised its expectations for sales
to exceed $15 billion, with sales growing at a high-single digit
percentage and EPS growing up to a few percentage points faster
than sales.
“In the first quarter, we executed well commercially,
operationally, and financially. Our pricing actions began to take
hold. Both gross and operating margins grew sequentially and year
over year, despite increasing inflationary headwinds,” said Ed
Schlesinger, executive vice president and chief financial
officer.
“Orders continue to be strong, and we expect the benefits of our
pricing actions to accelerate in the second quarter. We remain
focused on creating shareholder value in a dynamic and challenging
external environment,” Schlesinger continued. “Our cohesive
portfolio and ‘More Corning’ strategy create high-return
opportunities and provide a clear pathway to multiyear profitable
growth.”
Market-Access Platform Highlights:Corning holds
a leadership position in each of the markets addressed by its five
Market-Access Platforms.
Optical Communications – Corning continues to
capture growth, driven by increased spending on 5G and broadband
projects, along with the accelerated pace of data center builds as
applications rapidly move to the cloud. In the first quarter,
Telstra InfraCo, Australia’s largest telecommunications company,
announced that it is adding 20,000 new route kilometers to its
national fiber network and will utilize Corning’s ultra-low-loss
fiber with advanced bend. AT&T and Corning are launching a new
training program to equip thousands of Americans with the
manufacturing skills needed to design, engineer, and support a
growing fiber broadband network across the United States and bring
more broadband access to more Americans.
Display – Corning is the industry leader in the
display market with its global manufacturing footprint, cost
leadership, and innovative technical capabilities. Display is
delivering stabilized returns through favorable pricing and share
growth from its new Gen 10.5 facilities. Looking ahead, the market
for large-sized TVs is projected to grow at a double-digit compound
annual growth rate through 2024. Corning is well positioned to meet
growing demand as the leader in Gen 10.5, which provides the most
economical approach for larger sets.
Mobile Consumer Electronics – Corning continues
to advance its objective of delivering more content and capturing
higher revenue per device. During the quarter, Samsung launched the
Galaxy S22 series, featuring Corning’s premium cover materials on
the front and back of the devices – and on all five rear cameras on
the Galaxy S22 Ultra. Corning has also seen additional benefits
from continued adoption of new-to-the-world materials, such as
Ceramic Shield, which is featured on Apple’s iPhone 13 and iPhone
12 series.
Life Sciences – The company captured “More
Corning” opportunities by advancing key innovations for cell- and
gene-based therapies while building its portfolio of glass vials
and tubing. Vial production was up 162% year over year. Corning’s
portfolio, which includes its Corning Valor® Glass and new Corning
Velocity® Vials, has enabled the delivery of approximately 5.5
billion doses of COVID-19 vaccines to date. Additionally, West
Pharmaceutical Services announced a long-term supply agreement and
multimillion-dollar technology investment in Corning to enhance
injectable-drug packaging systems.
Automotive – Corning is uniquely suited to
address global trends toward cleaner, more connected, and
autonomous vehicles as the company continues to pursue a
$100-per-car content opportunity. Environmental Technologies is
outperforming the market despite industry production constraints.
Demand for Corning’s automotive glass solutions is growing,
especially in automotive interiors, for which the company has been
awarded over a billion dollars of business that spans multiple
years.
First-Quarter 2022 Results and
Comparisons (In millions, except per-share
amounts)
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
GAAP Net Sales |
|
$ |
3,680 |
|
|
$ |
3,676 |
|
|
|
0% |
|
|
$ |
3,290 |
|
|
|
12% |
|
GAAP Net Income |
|
$ |
581 |
|
|
$ |
487 |
|
|
|
19% |
|
|
$ |
599 |
|
|
|
(3%) |
|
GAAP EPS |
|
$ |
0.68 |
|
|
$ |
0.56 |
|
|
|
21% |
|
|
$ |
0.67 |
|
|
|
1% |
|
Core Sales* |
|
$ |
3,744 |
|
|
$ |
3,714 |
|
|
|
1% |
|
|
$ |
3,263 |
|
|
|
15% |
|
Core Net Income* |
|
$ |
465 |
|
|
$ |
465 |
|
|
|
0% |
|
|
$ |
402 |
|
|
|
16% |
|
Core
EPS* |
|
$ |
0.54 |
|
|
$ |
0.54 |
|
|
|
0% |
|
|
$ |
0.45 |
|
|
|
20% |
|
*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.
Optical Communications
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
1,198 |
|
|
$ |
1,206 |
|
|
|
(1%) |
|
|
$ |
937 |
|
|
|
28% |
|
Net Income Before Tax |
|
$ |
211 |
|
|
$ |
198 |
|
|
|
7% |
|
|
$ |
142 |
|
|
|
49% |
|
Net
Income |
|
$ |
166 |
|
|
$ |
155 |
|
|
|
7% |
|
|
$ |
111 |
|
|
|
50% |
|
In Optical Communications, sales grew 28% year over year to
nearly $1.2 billion, as network operators increased capital
spending to address demand for 5G, broadband, and the cloud. Net
income was $166 million, up 50% year over year and 7%
sequentially.
Display Technologies
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
959 |
|
|
$ |
942 |
|
|
|
2% |
|
|
$ |
863 |
|
|
|
11% |
|
Net Income Before Tax |
|
$ |
299 |
|
|
$ |
317 |
|
|
|
(6%) |
|
|
$ |
269 |
|
|
|
11% |
|
Net
Income |
|
$ |
236 |
|
|
$ |
252 |
|
|
|
(6%) |
|
|
$ |
213 |
|
|
|
11% |
|
In Display Technologies, sales grew 11% year over year to $959
million. Net income was $236 million, up 11% year over year.
Sequentially, both glass volume and price increased slightly. The
company expects glass prices to be up slightly sequentially in the
second quarter.
Specialty Materials
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
493 |
|
|
$ |
518 |
|
|
|
(5%) |
|
|
$ |
451 |
|
|
|
9% |
|
Net Income Before Tax |
|
$ |
95 |
|
|
$ |
117 |
|
|
|
(19%) |
|
|
$ |
115 |
|
|
|
(17%) |
|
Net
Income |
|
$ |
75 |
|
|
$ |
92 |
|
|
|
(18%) |
|
|
$ |
91 |
|
|
|
(18%) |
|
In Specialty Materials, sales grew 9% year over year to $493
million. 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. Net income was $75 million, down from the
prior year, driven by increased investments in innovation programs
that are moving toward commercialization.
Environmental Technologies
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
409 |
|
|
$ |
353 |
|
|
|
16% |
|
|
$ |
441 |
|
|
|
(7%) |
|
Net Income Before Tax |
|
$ |
94 |
|
|
$ |
69 |
|
|
|
36% |
|
|
$ |
94 |
|
|
|
0% |
|
Net
Income |
|
$ |
74 |
|
|
$ |
54 |
|
|
|
37% |
|
|
$ |
74 |
|
|
|
0% |
|
In Environmental Technologies, sales were $409 million, down 7%
year over year, as component shortages limited automotive
production. Net income of $74 million was flat year over year.
Life Sciences
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
310 |
|
|
$ |
317 |
|
|
|
(2%) |
|
|
$ |
300 |
|
|
|
3% |
|
Net Income Before Tax |
|
$ |
53 |
|
|
$ |
61 |
|
|
|
(13%) |
|
|
$ |
61 |
|
|
|
(13%) |
|
Net
Income |
|
$ |
42 |
|
|
$ |
49 |
|
|
|
(14%) |
|
|
$ |
48 |
|
|
|
(13%) |
|
In Life Sciences, sales increased 3% year over year to $310
million. Net income was $42 million, down 13% year over year,
primarily driven by COVID-related operational challenges in the
first half of the quarter, which impacted output.
Hemlock and Emerging
Growth Businesses
|
|
Q1 2022 |
|
|
Q4 2021 |
|
|
% change |
|
|
Q1 2021 |
|
|
% change |
|
Net Sales |
|
$ |
375 |
|
|
$ |
378 |
|
|
|
(1%) |
|
|
$ |
271 |
|
|
|
38% |
|
Net Income Before Tax |
|
$ |
(7) |
|
|
$ |
(8) |
|
|
|
13% |
|
|
$ |
(32) |
|
|
|
78% |
|
Net
Income |
|
$ |
(8) |
|
|
$ |
(7) |
|
|
|
(14%) |
|
|
$ |
(24) |
|
|
|
67% |
|
First-quarter sales increased 38% year over year to $375
million, primarily driven by increased sales of polysilicon. Demand
for Hemlock’s solar materials grew, and sales of semiconductor
materials remained robust. Automotive Glass Solutions and Corning
Pharmaceutical Technologies also contributed to year-over-year
growth.
Upcoming Investor EventsOn May 24, Corning will
attend the JP Morgan Global Technology, Media & Communications
Conference. On June 2, Corning will attend the Bernstein Strategic
Decisions Conference. On June 8, Corning will attend the Bank of
America Securities Global Technology Conference. On June 23,
Corning will attend Fox Advisors Virtual Transportation Technology
Conference. Corning will also host management visits to investor
offices in select cities.
First-Quarter Conference Call InformationThe
company will host its first-quarter conference call on Tuesday,
April 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 9372017. To listen to a live audio webcast of the
call, go to Corning’s website at
https://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 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. 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,
personnel, operations, our global supply chains and stock price;
global economic trends, competition and geopolitical risks, or an
escalation of sanctions, tariffs or other trade tensions , and
related impacts on our businesses' global supply chains and
strategies; changes in macroeconomic and market conditions, market
volatility, interest rates, capital markets, the value of
securities and other financial assets, precious metals, oil,
natural gas and other commodities and exchange rates (particularly
between the U.S. dollar and the Japanese yen, new Taiwan dollar,
euro, Chinese yuan and South Korean won), consumer demand, 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, materials, equipment, natural resources and utilities;
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; disruption to Corning's, our
suppliers' and manufacturers' supply chain, logistics, equipment,
facilities, IT systems, operations or commercial activities 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; effects of acquisitions, dispositions
and other similar transactions; 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, pricing actions and cost
reduction measures without impacting revenues; rate of technology
change; ability to enforce patents and protect intellectual
property and trade secrets; adverse litigation; product and
components performance issues; attraction and 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, regulations and international tax
standards; 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
(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
- Q1 2022 Earnings Release Financials
- Q1 2022 Earnings Infographic
- Corning’s Strong First-Quarter Sales and Improved Profitability
Highlight Outstanding Start to 2022
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