Corning Incorporated (NYSE: GLW) today announced second-quarter
2022 results and provided its outlook for third-quarter and
full-year 2022.
“Corning executed very well in a challenging external
environment and delivered outstanding second-quarter results, with
year-over-year sales and EPS growth of 7% and 8%, respectively. We
also delivered $440 million of free cash flow in the quarter and
improved profitability sequentially,” said Wendell P. Weeks,
chairman and chief executive officer.
Weeks continued, “Although three of our significant demand
drivers – panel maker utilization, automotive production, and
smartphone sales – were down, we achieved high-single digit growth
through ‘More Corning’ content opportunities and by capitalizing on
secular trends in optical and solar. This resilience demonstrates
the balance created by our focused and cohesive portfolio. Looking
ahead, we are well positioned to drive durable, profitable
long-term growth as our distinctive capabilities remain vital to
solving tough technology challenges for our customers and to
shaping new industries.”
Financial Highlights:
- GAAP sales were $3.62 billion and core sales were $3.76
billion; core sales grew 7% year over year.
- Sales growth was driven primarily by Optical Communications as
well as solar sales in Hemlock and Emerging Growth Businesses.
- Display Technologies sales declined 8% sequentially as volume
declined in line with the market and lower panel maker utilization;
glass price was up slightly sequentially.
- GAAP EPS was $0.66; core EPS was $0.57, an increase of 8% 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 expanded 90 basis
points and 120 basis points, respectively, from the first quarter
of 2022. The improvements were primarily driven by the benefits of
previously announced companywide pricing actions.
- Free cash flow was $440 million for the quarter; total
first-half free cash flow was $611 million, keeping the company on
pace for another year of strong cash generation.
- For the third quarter, Corning expects $3.65 billion to $3.85
billion in core sales with core EPS of $0.51 to $0.55.
- Management expects Display Technologies volume to be down
sequentially by a mid-teen percentage, in line with the market and
lower panel maker utilization.
- Management now expects full-year core sales to slightly exceed
$15 billion, growing in a range of 6% to 8%, with core EPS growing
in line with sales.
“We’re pleased with our results for the quarter and first half
of the year. In the second quarter, we delivered sales of $3.8
billion and EPS of $0.57. Our companywide pricing actions and
operational focus drove margin improvement. We’re executing well,
and our financial priorities remain the same: a strong balance
sheet, solid free cash flow generation, and a highly disciplined
approach to investment decisions,” said Ed Schlesinger, executive
vice president and chief financial officer.
“In the third quarter, we expect the challenges we’re seeing in
three of our largest markets to continue, and this is reflected in
our guidance. Based on the opportunities and initiatives we have
underway for the second half, we now expect sales to slightly
exceed $15 billion this year, growing in a range of 6% to 8%, with
EPS growing in line with sales,” Schlesinger continued.
Strategy in Action
Corning takes a long-view approach, striving to be a catalyst
for positive change and to help move the world forward. The company
drives durable, profitable multiyear growth by inventing, making,
and selling life-changing products while cultivating advantaged
relationships with industry leaders and ultimately incorporating
more content into customers’ offerings. To do so, Corning invests
in a set of vital capabilities that are becoming increasingly
relevant to profound transformations touching many facets of daily
life. Today, Corning's markets include optical communications,
mobile consumer electronics, display, automotive, solar,
semiconductors, and life sciences.
Recent highlights include:
- Increasing the resilience of
the U.S. semiconductor
supply chain by expanding capacity in New York state. Gov.
Kathy Hochul announced how Corning’s advanced optics expertise will
support the growing semiconductor industry.
- Driving more content into the mobile devices that
people are buying through Corning’s premium cover
materials, which are on the front and back of the Samsung Galaxy
S22 devices released earlier this year. Corning’s DX products are
featured on all five rear cameras of the Samsung Galaxy S22
Ultra.
- Supporting the extended reach of
broadband, as network access is
increasingly viewed as a fundamental human right, by joining forces
with AT&T to launch a training program focused on equipping
thousands of technicians across the industry with the skills
critical to engineer a growing fiber broadband network.
Additionally, Corning collaborated with Safety NetAccess to create
a highly connected infrastructure for remote locations.
- Applying industry-leading solutions to enable the
world’s deepest look into the universe by engineering and
manufacturing key optical instruments for NASA’s James Webb Space
Telescope.
- Continuing to advance global health care by
collaborating with West Pharmaceutical Services to enable advanced
injectable-drug packaging and delivery systems for the
pharmaceutical industry. This partnership is designed to help speed
commercialization for biologic drug developers.
- Extending its expertise in mobile consumer
electronics to advance the automotive industry.
Continental recognized Corning’s Automotive Glass Solutions
business as a “Supplier of the Year” for its AutoGrade™ Corning
Gorilla Glass technology.
- Continuing its dedication to all its
stakeholders by earning the Environmental Protection
Agency’s ENERGY STAR® Partner of the Year award for the ninth
consecutive time.
Second-Quarter 2022
Results and Comparisons (In millions,
except per-share amounts)
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
% change |
GAAP Net Sales |
|
$ |
3,615 |
$ |
3,680 |
|
(2%) |
$ |
3,501 |
|
3% |
GAAP Net Income (1) |
|
$ |
563 |
$ |
581 |
|
(3%) |
$ |
449 |
|
25% |
GAAP EPS |
|
$ |
0.66 |
$ |
0.68 |
|
(3%) |
$ |
(0.42) |
|
* |
Core Sales (2) |
|
$ |
3,762 |
$ |
3,744 |
|
— |
$ |
3,504 |
|
7% |
Core Net Income (1)(2) |
|
$ |
489 |
$ |
465 |
|
5% |
$ |
459 |
|
7% |
Core
EPS (2) |
|
$ |
0.57 |
$ |
0.54 |
|
6% |
$ |
0.53 |
|
8% |
(1) Represents net income attributable to Corning
Incorporated.(2) 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
Optical Communications
|
|
Q2 2022 |
|
|
Q1 2022 |
|
|
% change |
Q2 2021 |
% change |
Net Sales |
|
$ |
1,313 |
|
|
$ |
1,198 |
|
|
|
10% |
$ |
1,075 |
|
22% |
Net Income Before Tax |
|
$ |
233 |
|
|
$ |
211 |
|
|
|
10% |
$ |
188 |
|
24% |
Net
Income |
|
$ |
182 |
|
|
$ |
166 |
|
|
|
10% |
$ |
148 |
|
23% |
In Optical Communications, sales grew 22% year over year and 10%
sequentially, reaching $1.3 billion. Year-over-year sales growth
was driven by 5G, broadband, and the cloud. Net income was $182
million, up 23% year over year, primarily driven by strong volume
and price increases.
Display Technologies
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
|
|
% change |
Net Sales |
|
$ |
878 |
$ |
959 |
|
(8%) |
$ |
939 |
|
|
|
(6%) |
Net Income Before Tax |
|
$ |
287 |
$ |
299 |
|
(4%) |
$ |
312 |
|
|
|
(8%) |
Net
Income |
|
$ |
228 |
$ |
236 |
|
(3%) |
$ |
248 |
|
|
|
(8%) |
In Display Technologies, sales were $878 million, down 6% year
over year and 8% sequentially, as volume declined in line with the
market and lower panel maker utilization. As expected, glass price
was up slightly sequentially.
Specialty Materials
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
% change |
Net Sales |
|
$ |
485 |
$ |
493 |
|
(2%) |
$ |
483 |
|
— |
Net Income Before Tax |
|
$ |
115 |
$ |
95 |
|
21% |
$ |
103 |
|
12% |
Net
Income |
|
$ |
91 |
$ |
75 |
|
21% |
$ |
81 |
|
12% |
In Specialty Materials, sales of $485 million were consistent
with a strong second-quarter 2021. Net income was $91 million, up
12% year over year, driven by adoption of premium cover
materials.
Environmental Technologies
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
% change |
Net Sales |
|
$ |
356 |
$ |
409 |
|
(13%) |
$ |
407 |
|
(13%) |
Net Income Before Tax |
|
$ |
78 |
$ |
94 |
|
(17%) |
$ |
102 |
|
(24%) |
Net
Income |
|
$ |
62 |
$ |
74 |
|
(16%) |
$ |
81 |
|
(23%) |
In Environmental Technologies, second-quarter sales were $356
million, down 13% year over year and sequentially. The automotive
industry continued to experience constraints in the second quarter
due to prolonged semiconductor chip shortages, the Russia-Ukraine
war, and COVID-19 lockdowns in China. The company is prepared to
serve global demand as automotive production increases.
Life Sciences
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
% change |
Net Sales |
|
$ |
312 |
$ |
310 |
|
1% |
$ |
312 |
|
— |
Net Income Before Tax |
|
$ |
47 |
$ |
53 |
|
(11%) |
$ |
66 |
|
(29%) |
Net
Income |
|
$ |
37 |
$ |
42 |
|
(12%) |
$ |
52 |
|
(29%) |
In Life Sciences, sales reached $312 million, consistent year
over year and up slightly sequentially. Net income was $37 million.
Lower demand for COVID-related products was offset by growth in
research and bioproduction. Additionally, COVID-19 lockdowns in
China impacted sales and profitability.
Hemlock and Emerging Growth Businesses
|
|
Q2 2022 |
Q1 2022 |
% change |
Q2 2021 |
% change |
Net Sales |
|
$ |
418 |
$ |
375 |
|
11% |
$ |
288 |
|
45% |
Net Income Before Tax |
|
$ |
35 |
$ |
(7) |
|
* |
$ |
(18) |
|
* |
Net
Income (Loss) |
|
$ |
25 |
$ |
(8) |
|
* |
$ |
(15) |
|
* |
* Not meaningful
In Hemlock and Emerging Growth Businesses, sales reached $418
million, a 45% increase year over year and an 11% increase
sequentially. Strong performance was largely driven by continued
growth in Hemlock as the company continues to see increased demand
for solar materials. Automotive Glass Solutions and Corning
Pharmaceutical Technologies also contributed to year-over-year
growth.
Upcoming Investor EventsOn Sept. 8, Corning
will attend Citi’s 2022 Global Technology Conference. On Sept. 13,
Corning will attend the Goldman Sachs 2022 Communacopia +
Technology Conference. Corning will also host management visits to
investor offices in select cities.
Second-Quarter Conference Call InformationThe
company will host its second-quarter conference call on Tuesday,
July 26, at 8:30 a.m. EDT. To participate, individuals may
pre-register here prior to the start of the call. Once the required
fields are completed, click “Register.” A telephone number and
personal PIN are auto generated and will pop up on screen.
Participants will have the choice to “Dial In” or have the system
“Call Me.” A confirmation email will also be sent with specific
dial-in information. To listen to a live audio webcast of the call,
go to Corning's events page 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 DisclosureIn 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, solar, semiconductors, 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
- Corning Reports Strong Second-Quarter Results Highlighted by
Continued Growth and Improved Profitability
- Q2 2022 Earnings Release Financials
- Q2 2022 Earnings Infographic
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