Corning Incorporated (NYSE: GLW) today announced results for
first-quarter 2020.
- GAAP sales were $2.4 billion; core sales were $2.5 billion
- GAAP EPS was $(0.16); core EPS was $0.20
- GAAP net loss was $96 million; core net income was $177
million
- The primary difference between GAAP and core results was
non-cash charges related to capacity realignment and cash severance
payments
Given the economic uncertainty and disruption created by
COVID-19, the company is withdrawing its full-year 2020 guidance.
In response to the pandemic, the company has been and will continue
focusing actions on three core priorities: preserving the financial
strength of the company, protecting employees and communities, and
delivering on customer commitments.
Wendell P. Weeks, chairman and chief executive officer, said:
“We’re keeping our company strong throughout this difficult period.
Guided by our Values, Corning is acting compassionately and
systematically to support our stakeholders in multiple
ways. We’ve prioritized the safety of our employees,
workplaces, and communities while delivering for customers and
contributing to public-health and economic-relief efforts. I am
proud of our employees’ dedication to executing on all these
fronts.
“We’ve built Corning to survive difficult circumstances – across
three centuries, our people have persevered and succeeded through
world wars, natural disasters, and economic catastrophes. We are
confident in our ability to manage through the current challenges
while maintaining our financial strength and growth prospects.
“We, like all companies, are being impacted by the escalating
global economic and health consequences of the pandemic. In the
first quarter we took actions to navigate through these
unprecedented times and will take additional actions in the second
quarter,” Weeks continued.
Preserving Financial Health
“In the first quarter, our businesses held up well, as we
effectively executed our strategy despite the growing impact of
COVID-19,” said Tony Tripeny, executive vice president and chief
financial officer. “Importantly, we’re operating on a strong
financial foundation, keeping ourselves positioned for long-term
growth and adjusting to near-term conditions,” Tripeny continued.
“Anticipating lower sales, we are adjusting our operating plan to
reduce costs and capital spending. We have essentially no debt
coming due over the next two years, and we expect to maintain a
strong cash balance and generate positive free cash flow for the
year. We plan to maintain our dividend and have paused share
buybacks. We are committed to preserving the financial strength of
the company.”
First-Quarter 2020 Results and
Comparisons(In millions, except per-share
amounts)
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
GAAP Net Sales |
$ |
2,391 |
|
|
$ |
2,817 |
|
(15 |
%) |
|
$ |
2,812 |
|
(15 |
%) |
GAAP Net (Loss) Income |
$ |
(96 |
) |
|
$ |
32 |
|
** |
|
$ |
499 |
|
** |
GAAP EPS |
$ |
(0.16 |
) |
|
$ |
0.01 |
|
** |
|
$ |
0.55 |
|
** |
Core Sales* |
$ |
2,529 |
|
|
$ |
2,851 |
|
(11 |
%) |
|
$ |
2,850 |
|
(11 |
%) |
Core Net Income* |
$ |
177 |
|
|
$ |
406 |
|
(56 |
%) |
|
$ |
365 |
|
(52 |
%) |
Core
EPS* |
$ |
0.20 |
|
|
$ |
0.46 |
|
(57 |
%) |
|
$ |
0.40 |
|
(50 |
%) |
*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
First-Quarter Segment Results
Display Technologies
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
Net Sales |
$ |
751 |
|
$ |
795 |
|
(6 |
%) |
|
$ |
818 |
|
(8 |
%) |
Net Income Before Tax |
$ |
192 |
|
$ |
227 |
|
(15 |
%) |
|
$ |
263 |
|
(27 |
%) |
Net
Income |
$ |
152 |
|
$ |
180 |
|
(16 |
%) |
|
$ |
208 |
|
(27 |
%) |
In Display Technologies, first-quarter sales were $751 million,
and net income was $152 million. Display glass market first-quarter
volume grew by a low-single digit percentage sequentially, and
Corning’s volume was down by a low-single digit percentage, both as
expected. Sequential price declines were moderate.
Optical Communications
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
Net Sales |
$ |
791 |
|
$ |
903 |
|
(12 |
%) |
|
$ |
1,064 |
|
(26 |
%) |
Net Income Before Tax |
$ |
37 |
|
$ |
81 |
|
(54 |
%) |
|
$ |
181 |
|
(80 |
%) |
Net
Income |
$ |
29 |
|
$ |
62 |
|
(53 |
%) |
|
$ |
142 |
|
(80 |
%) |
In Optical Communications, first-quarter sales of $791 million
were consistent with management expectations. The business
continues to adjust its cost structure to match near-term
sales.
Environmental Technologies
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
Net Sales |
$ |
320 |
|
$ |
374 |
|
(14 |
%) |
|
$ |
362 |
|
(12 |
%) |
Net Income Before Tax |
$ |
44 |
|
$ |
81 |
|
(46 |
%) |
|
$ |
70 |
|
(37 |
%) |
Net
Income |
$ |
35 |
|
$ |
64 |
|
(45 |
%) |
|
$ |
55 |
|
(36 |
%) |
In Environmental Technologies, vehicle manufacturers suspended
production in key markets. As a result, first-quarter sales were
down 12% year over year and below management expectations.
Profitability was impacted by lower volume.
Specialty Materials
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
Net Sales |
$ |
352 |
|
$ |
453 |
|
(22 |
%) |
|
$ |
309 |
|
14 |
% |
Net Income Before Tax |
$ |
65 |
|
$ |
119 |
|
(45 |
%) |
|
$ |
62 |
|
5 |
% |
Net
Income |
$ |
51 |
|
$ |
94 |
|
(46 |
%) |
|
$ |
49 |
|
4 |
% |
Specialty Materials first-quarter sales of $352 million exceeded
expectations. Sales increased 14% year over year due to strong
demand for premium glasses, other Gorilla Glass innovations, and
Advanced Optics products.
Life Sciences
|
Q1 2020 |
|
Q4 2019 |
|
% change |
|
Q1 2019 |
|
% change |
Net Sales |
$ |
258 |
|
$ |
256 |
|
1 |
% |
|
$ |
243 |
|
6 |
% |
Net Income Before Tax |
$ |
48 |
|
$ |
49 |
|
(2 |
%) |
|
$ |
39 |
|
23 |
% |
Net
Income |
$ |
38 |
|
$ |
38 |
|
|
|
$ |
31 |
|
23 |
% |
Life Sciences first-quarter sales of $258 million were in line
with expectations, up 6% year over year. Net income was up 23% year
over year, driven by higher sales volume and manufacturing
performance optimization.
Upcoming Investor EventsOn May 13, Corning will
attend the J.P. Morgan Global Technology, Media and Communications
Conference. And June 2, Corning will attend the Bank of America
Global Technologies Conference. Both will be virtual
conferences.
First-Quarter Conference Call InformationThe
company will host a first-quarter conference call on Tuesday, April
28, at 8:30 a.m. EST. To participate, please call toll free (877)
226-8216 or for international access, call (409) 207-6983
approximately 10 to 15 minutes prior to the start of the call. The
Access Code is 165320. 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
Release Non-GAAP financial measures are not in accordance
with, or an alternative to, U.S. generally accepted accounting
principles (“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
StatementsThis 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 duration and severity of
the recent COVID-19 (coronavirus) outbreak, and its ultimate impact
across our businesses on demand, operations and our global supply
chains; the effects of acquisitions, dispositions and other similar
transactions by the Company, the effect of 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;
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 their ongoing operations and manufacturing
expansions and pay their receivables when due; loss of significant
customers; changes in tax laws and regulations including the Tax
Cuts and Jobs Act of 2017; and the potential impact of legislation,
government regulations, and other government action and
investigations.
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. 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.
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 169-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 mobile consumer electronics, optical communications,
automotive technologies, life sciences technologies, and display
technologies.
Media Relations
Contact: M. Elizabeth
Dann
(607)
974-4989
dannme@corning.com
Investor Relations Contact: Ann H.S. Nicholson
(607) 974-6716 nicholsoas@corning.com
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