Corning Incorporated
www.corning.com
News Release
FOR RELEASE - JULY 26, 2022
Corning Reports Strong Second-Quarter Results
Highlighted by Continued Growth and Improved Profitability
Core sales grew 7% year over year to $3.8 billion and
core EPS increased 8% year over year to $0.57
Optical Communications sales grew 22% year over year
Second-quarter free cash flow was $440 million, keeping the company on
pace for another year of strong cash generation
Management now expects full-year core sales to slightly exceed $15 billion, growing 6% to 8%
CORNING, N.Y. - 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.
o Sales growth was driven primarily by Optical Communications as well as solar sales in Hemlock and Emerging Growth Businesses.
o 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.
© 2022 Corning Incorporated. All Rights Reserved.
Corning Reports Strong Second-Quarter Results Highlighted by Continued Growth and Improved Profitability
Page 2
- 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.
o 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 announcedhow 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.
© 2022 Corning Incorporated. All Rights Reserved.
Corning Reports Strong Second-Quarter Results Highlighted by Continued Growth and Improved Profitability
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- Supporting the extended reach of broadband, as network access is increasingly viewed as a fundamental human right, by joining forces with AT&Tto 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 NetAccessto create a highly connected infrastructure for remote locations.
- Applying industry-leading solutions to enable the world's deepest look into the universe byengineering and manufacturing key optical instrumentsfor 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 Yearaward 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% |
- Represents net income attributable to Corning Incorporated.
- 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.
© 2022 Corning Incorporated. All Rights Reserved.
Corning Reports Strong Second-Quarter Results Highlighted by Continued Growth and Improved Profitability
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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.
© 2022 Corning Incorporated. All Rights Reserved.
Corning Reports Strong Second-Quarter Results Highlighted by Continued Growth and Improved Profitability
Page 5
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 Events
On 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 Information
The company will host its second-quarter conference call on Tuesday, July 26, at 8:30 a.m. EDT. To participate, individuals may pre-registerhereprior 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 pageand follow the instructions.
Presentation of Information in this News Release
This 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 Statements
The 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
© 2022 Corning Incorporated. All Rights Reserved.
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Corning Inc. published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2022 11:18:03 UTC.