Executives at Corning Incorporated (NYSE:GLW) will detail a path
to achieve $10 billion in sales by 2014 when they speak at the
company’s annual investor meeting in New York at 9 a.m. today.
Corning recently announced 2010 sales of $6.6 billion.
“Global innovation is at the heart of Corning today and has been
for our 160-year history,” Wendell P. Weeks, chairman, chief
executive officer, and president, will tell investors. “Our
capabilities in glass and ceramics have the potential to deliver
solutions across many industries that address significant global
technology trends, driven by consumer desires to access and share
information wherever they are, whenever they want,” he will say.
“We envision a world where technology enables seamless delivery of
real-time information…a natural and intuitive interaction with the
virtual world. This is a world of specialty glass with vivid
displays, multi-functional ‘smart’ surfaces, and interactive
devices.”
Weeks will point out that these devices require unique specialty
glass that is lightweight, highly damage resistant, elegant in
design, and environmentally friendly. As communications become
increasingly ubiquitous, carriers must invest in high-speed
networks with massive bandwidth capacity. “Both are areas in which
Corning has been the world’s technology leader for many decades,”
he will add.
Path to $10 billion in sales
Display Technologies
Rapidly expanding consumer demand for greater touch-screen
capability, mobile computing and increased affordability of PCs in
emerging economies - combined with the continued expansion of LCD
TVs around the world - are likely to create demand for an
additional two billion square feet of new LCD glass between now and
2014, James P. Clappin, president, Corning Glass Technologies
Group, will explain.
Clappin will say that a market shift to mobile computing will
continue over the next several years, motivated by the rapid growth
of tablets in the personal computer space. Corning believes the PC
market could grow at a compound annual rate of about 16% through
2014. “This presents an exceptional growth opportunity for Corning.
Both our EAGLE XG® Slim and Corning® Gorilla® Glass have emerged as
industry leaders for this fast-growing tablet segment,” he will
say. He also will add that LCD should remain the TV technology of
choice, driven by growth in emerging regions and a shortened TV
replacement cycle. “Our research indicates that the LCD TV
replacement rate should be twice that experienced with traditional
CRT televisions,” he will comment. Clappin also will say that the
number of televisions per household and the penetration of LCD TVs
as a percentage of the worldwide installed base are expected to
have more room to grow in the future. “At the end of 2010, only 27%
of all TVs worldwide were LCD units,” he will note. In summarizing
2011 expectations, Clappin will point out that the company expects
the overall LCD glass market to reach between 3.6 billion and 3.8
billion square feet, and that glass supply and demand should remain
balanced.
Corning® Gorilla® Glass opportunities
Moving to Corning’s fastest-growing product, Gorilla Glass,
Clappin will say the company is committed to capturing additional
market opportunities in the handheld and IT device space. “Corning
Gorilla Glass is the cover glass of choice for manufacturers of
high-end mobile phones. We expect the number of these devices using
cover glass to quadruple over the next four years, presenting us
with a significant opportunity for growth,” he will remark. An even
larger opportunity for Corning’s Gorilla Glass is the emergence of
tablet computing, Clappin will point out. Corning estimates that
tablet computer sales could grow from roughly 20 million units last
year to almost 180 million by 2014. “What makes the tablet market
so appealing for us is that all of these devices will likely
require a highly durable, scratch-resistant piece of cover glass,”
he will say.
“Our ability to manufacture Gorilla Glass at 0.7 mm or thinner
gives us the potential to quickly grow our presence in the
flat-panel television market. The unparalleled surface quality and
scratch resistance supports both new edge-to-edge design trends and
improved optical viewing experiences,” he will comment.
Clappin will add that Corning continues to innovate with the
ability to apply Gorilla Glass to other attractive markets such as
architectural, automotive, and appliance industries.
Telecommunications
“The telecommunications market is moving into a renewed
investment cycle driven by growing wireless, fiber-to-the-home, and
data center (enterprise) market opportunities,” Clark S. Kinlin,
president and chief executive officer, Corning Cable Systems, will
tell investors. The optical wireless component of the market should
have a compound growth rate of 20% or better through 2014, he will
remark, “with bandwidth demand growing at 40% over the next few
years.” Globally, over 400 million new mobile subscribers are
expected to be added in 2011 alone. Corning’s planned acquisition
of MobileAccess provides the company with an accelerated path into
this exciting market opportunity.
Kinlin will say that FTTH installations are set for a new wave
of deployments around the globe, driven by customer demand for more
advanced video services and 4G mobile broadband. Fiber-to-the-home
installations should grow at a compound rate of 18% for several
years.
Corning’s Pretium EDGE™ data center solution is also expected to
continue to build significant market acceptance. In 2010 Corning
again expanded its optical fiber and cable manufacturing presence
in China to support the fast growing wireless and FTTH in-country
markets.
“Corning is poised to grow our telecommunications sales by 15%
this year,” Kinlin will conclude.
Life Sciences
Corning’s Life Sciences segment is poised to double its revenues
from $500 million to $1 billion by 2014, driven primarily by
broadening its new business platforms, selectively pursuing
additional acquisitions to expand the company’s product portfolio,
and growing its established businesses. Mark A. Beck, senior vice
president, Corning Life Sciences, will say, “China represents a
geographic expansion opportunity for the segment’s existing
business.” He will explain that as the country’s pharmaceutical
industry continues to flourish, the region’s research and
development spending is expected to grow at a compound rate of 24%
through 2014. Corning is investing to capitalize on the growth
potential of this important region and will open a local
manufacturing and distribution center later this year.
Environmental Technologies
Corning’s Environmental Technologies segment has the potential
for significant growth over the next several years James B. Flaws,
vice chairman and chief financial officer, will explain. He will
add that the automotive industry saw a strong recovery in 2010 and
Corning anticipates worldwide auto production could reach 77
million vehicles in 2011. Automotive substrate orders increased 28%
last year. Flaws will point out that global auto demand in
developing regions (Brazil, Russia, India, and China) is expected
to remain strong for several years and eventually could surpass
growth levels in developed regions. China became the world’s
largest market for autos in 2009.
Flaws also will point out that there are positive indications
that the long-stagnant U.S. trucking industry may be turning
around. New regulations requiring emission-control systems for
non-road diesel vehicles in several countries, as well as for
heavy-duty diesel engines in Europe, will create additional
opportunities for Corning over the next several years.
Emerging Technologies
“Innovation remains critical to Corning building entirely new
businesses,” Flaws will say. The company is making a major
investment in research and development for photovoltaics. Corning
is in the process of expanding manufacturing capabilities at the
company’s Harrodsburg, Ky., plant to begin producing PV glass early
in 2012. The company is targeting late 2011 for its first
photovoltaic glass customer. New businesses such as PV and others
built from adjacent technology innovations are expected to generate
up to $500 million in new sales in the future.
Investing for growth
In order to capture these significant growth opportunities,
Corning expects 2011 capital spending to be in the range of $2.4
billion to $2.7 billion, primarily in support of expanding LCD and
Corning Gorilla Glass capacity and investments in its environmental
and life sciences businesses.
“Corning is a growth company. We believe we have noteworthy
sales growth across each of our businesses this year as we build
toward our $10 billion target. Our growth engine will be driven by
growing market demand for Gorilla Glass, continued LCD glass demand
as flat-panel televisions begin penetrating new developing markets,
increased worldwide auto production and a rebound in heavy-duty
diesel engine production, and a stronger overall telecommunications
market for fiber-to-the-home and enterprise solutions,” Flaws will
conclude.
Conference Broadcast Information
Corning’s annual investor meeting will be held on Friday, Feb. 4
at Cipriani, located at 110 E. 42nd Street, New York. Corning’s
products and technologies will be on display from 7:30 a.m. – 9
a.m. Corning will make the presentation at its annual investor
conference available to the public through a video and audio
webcast and telephone access. The broadcast will begin at 9 a.m.
EST. The dial-in number is (800) 230-1092 (U.S.) or (612) 288-0337
(international). The password is 2011 IR Meeting. The leader is Ken
Sofio. A replay of the call will be available at 1 p.m. EST and
will run through 5 p.m. EST on Friday, Feb. 18, 2011. To access the
replay, dial (800) 475-6701 (U.S.) or (320) 365-3844
(international). The access code is 190966. The audio 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 net income and EPS
measures exclude restructuring, impairment and other charges and
adjustments to prior estimates for such charges. Additionally, the
company’s non-GAAP measures exclude adjustments to asbestos
settlement reserves, gains and losses arising from debt
retirements, charges or credits arising from adjustments to the
valuation allowance against deferred tax assets, equity method
charges resulting from impairments of equity method investments or
restructuring, impairment or other charges taken by equity method
companies and gains from discontinued operations. The company
believes presenting non-GAAP net income and EPS measures is helpful
to analyze financial performance without the impact of unusual
items that may obscure trends in the company’s underlying
performance. Reconciliation of these non-GAAP measures can be found
on the company’s Web site by going to
www.corning.com/investor_relations and clicking Financial Reports
on the left. Reconciliation also accompanies 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 Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 150 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy and metrology.
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