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LCD customer agreements
renewed
CORNING, N.Y., October 30,
2013 - Corning Incorporated (NYSE: GLW) today
announced its results for the third quarter of 2013. The results
being reported today are consistent with the preview provided by
the company on Oct. 22, 2013. Third-quarter results included:
-
Core sales were $2.1 billion*, an increase of 10%
over the comparable period last year. Net sales (GAAP) were $2.1
billion.
-
Core earnings per share were $0.33*, demonstrating
the fourth consecutive quarter of year-over-year core
earnings-per-share growth, and an increase of 18% over a year ago.
GAAP earnings per share were $0.28.
-
In the Display Technologies segment, LCD glass
sequential price declines continue to be moderate, as expected.
Combined sequential LCD glass volume was up slightly.
-
In the Telecommunications segment, sales increased
24% and core net income increased 86%* on a year-over-year basis.
GAAP earnings increased 77% for the same period.
-
Core gross margin was 44%*, up nearly two
percentage points year over year and up slightly sequentially.
Third-Quarter Financial
Comparisons
In millions, except percentages and per-share
amounts
|
Core Performance* |
|
Q3 2013 |
Q3 2012 |
% Change |
Core Net Sales |
$2,108 |
$1,920 |
10% |
Core Equity Earnings |
$121 |
$173 |
(30%) |
Core Earnings |
$487 |
$415 |
17% |
Core Earnings EPS |
$0.33 |
$0.28 |
18% |
|
GAAP |
|
Q3 2013 |
Q3 2012 |
% Change |
Net Sales |
$2,067 |
$2,038 |
1% |
Equity Earnings |
$138 |
$240 |
(43%) |
Net Income |
$408 |
$533 |
(23%) |
EPS |
$0.28 |
$0.36 |
(22%) |
*These are non-GAAP financial
measures. Corning moved to disclosing core performance measures to
provide investors a clear view of the company's core operating
results. The reconciliation between GAAP and non-GAAP measures is
provided in the tables following this news release, as well as on
the company's investor relations website. Core performance metrics
(non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen to U.S. dollar exchange rate and other yen
transactions, equity earnings from the polysilicon business of
Dow Corning Corporation, as well as other
special items. See "Use of Non-GAAP Financial Measures" in our Form
8-K filed on Oct. 30, 2013, for details on Core Performance
measures.
"We had excellent third-quarter results. Our strong sales and gross
margin performance drove an 18%* improvement in core earnings per
share in the quarter. One of our goals over the past 18 months has
been to restore positive momentum in our Display Technologies
segment. We achieved another important milestone on this front
recently by renewing the customer agreements that we first
announced last October. The renewals carry through at least 2014,"
Wendell P. Weeks, chairman, chief executive officer and president,
said.
Third-Quarter Core
Performance Segment Results
Display Technologies segment core sales for the wholly owned LCD
glass business were $689 million*, a 7% improvement compared with a
year ago. Total glass volume from Corning's wholly owned business
and Samsung Corning Precision Materials Co., Ltd., (SCP) saw
low-teens year-over-year increases and a low-single-digit
sequential improvement. LCD glass price declines for the wholly
owned business and SCP were moderate and in line with expectations.
Core earnings were down 9% year over year. This decline was
entirely driven by reduced earnings at SCP. The core earnings of
the wholly owned business were up significantly year over year.
Telecommunications segment sales were $650
million, a 24% increase from last year's third quarter. The
increase was driven primarily by stronger results from its carrier,
enterprise, and wireless network businesses. Core earnings were up
86%* year over year, reflecting increased sales volume in
combination with cost controls.
Specialty Materials segment sales grew 8%
sequentially to $326 million, meeting company expectations. Segment
core earnings grew 23%* sequentially, driven by increased sales and
manufacturing improvements in Corning®
Gorilla® Glass.
Environmental Technologies segment sales were $225
million, a 3% decline year over year. However, improved operating
performance and excellent manufacturing efficiency resulted in
earnings growth of 19% in the quarter.
Life Sciences segment sales increased 39% year
over year to $215 million. The growth was driven by the successful
acquisition of the Discovery Labware business, offset somewhat by
the impact of the U.S. government sequestration. Core earnings for
the Life Sciences segment more than doubled from last year.
Core equity earnings from Dow Corning Corporation
were comparable to those of a year ago for the third quarter, and
better than expectations.
Core gross margin in the quarter was 44%*,
exceeding expectations and providing a significant improvement
sequentially and year over year. Corning ended the quarter with
$5.4 billion in cash and short-term investments. The company used
$209 million to repurchase approximately 14 million shares as part
of its continuing program to return value to shareholders.
Looking
Forward
"We anticipate that fourth-quarter results will be sequentially
lower due to normal seasonal declines in our non-display
businesses. This decline will be larger than normal due to a more
significant downturn in optical fiber sales volume. The optical
fiber decline is occurring primarily in North America and China. We
are also seeing slower-than-expected construction of the National
Broadband Network (NBN) in Australia," James B. Flaws, vice
chairman and chief financial officer, said.
The company anticipates fourth-quarter LCD glass
volume being down by low single digits on a sequential basis, and
sequential price declines will be consistent with recent quarters.
Global retail TV demand remains on track with the company's
expectations, and overall screen sizes are growing. Inventory
levels in the supply chain are expected to remain in the 15-to
16-week range, down from a high of 18 weeks earlier in the
year.
Sequentially, Specialty Materials segment sales
are expected to be in line with the previous quarter.
Telecommunications segment sales in the fourth quarter are expected
to be down slightly year over year.
In the Environmental Technologies segment, the
company expects sales to be up slightly from the fourth quarter of
2012. In the Life Sciences segment, sales are expected to be up 10%
over last year, driven by the Discovery Labware acquisition.
Core equity earnings from Dow Corning are expected
to be consistent with last quarter.
"Despite the stronger seasonality impact on the
fourth quarter, we remain well-positioned for growth in the
future," Flaws said. "Acquiring full ownership of Samsung Corning
Precision should generate strong financial results for Corning.
When the deal is complete early next year, we should add
approximately $2 billion in annual sales and about $350 million in
incremental net income to our bottom line. When combined with our
newly announced share repurchase program, Corning should see
approximately 20% accretion in fully diluted earnings per
share."
Upcoming Investor
Events
Corning will attend the UBS Technology Conference on Nov. 20 in
Sausalito, Calif., and also attend the Credit Suisse Technology
Conference on Dec. 3 in Scottsdale, Ariz.
Third-Quarter Conference
Call Information
The company will host a third-quarter conference call on Wednesday,
Oct. 30, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1092 or for international access call (612) 288-0329
approximately 10-15 minutes prior to the start of the call. The
password is 'QUARTER THREE'. The host is 'NICHOLSON'. To listen to
a live audio webcast of the call, go to Corning's website at
www.corning.com/investor_relations and click "Investor Events" on
the left. A replay will be available beginning at 11:00 a.m. ET and
will run through 5 p.m. ET, Wednesday, Nov. 13, 2013. To listen,
dial (800) 475-6701 or for international access dial (320)
365-3844. The access code is 304926. The 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 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 the company's website by going to
www.corning.com/investor_relations and clicking "Financial Reports"
on the left. These reconciliations also accompany 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 160 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.
Media Relations
Contact:
Daniel F. Collins
(607) 974-4197
collinsdf@corning.com
Investor Relations
Contact:
Ann H. S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Q3 2013 Financials
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Corning Incorporated via Thomson Reuters ONE
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