ENP Newswire - 30 January 2014
Release date- 28012014 - CORNING, N.Y. - Corning Incorporated (NYSE: GLW) today announced its results for the fourth quarter and full year of 2013.
Core earnings per share were $0.29*, an increase of 4% over last year's fourth quarter, and better than expected. GAAP earnings per share were $0.30.
Core sales were $2 billion*, a 2% decline from the comparable period last year. GAAP sales also were $2 billion.
In the Display Technologies segment, price declines for the quarter were again moderate. Total LCD glass volume was at record levels, improving 4% over the year-ago period. The total glass volume combines Corning's wholly owned business and Samsung Corning Precision Materials Co., Ltd.
Optical Communications segment (formerly Telecommunications) sales increased 12% over the year-ago period.
Core sales were $7.95 billion*, a 5% increase from $7.61 billion last year. GAAP sales were $7.82 billion.
Core earnings per share were $1.23*, a 16% year-over-year improvement compared to last year's core earnings of $1.06*. GAAP earnings per share were $1.34.
Free cash flow for the year was strong at $1.2 billion.
Fourth-Quarter Financial Comparisons
*In millions, except percentages and per- share amounts
Core Net Sales
Core Equity Earnings
Core Earnings EPS
Full-Year Financial Comparisons
Core Net Sales
Core Equity Earnings
Core Earnings EPS
*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 January 28, 2014, for details on Core Performance measures.
'2013 was a very successful year for Corning,' Wendell P. Weeks, chairman, chief executive officer, and president, said in summarizing full-year results. 'We achieved the company's primary performance goal of restoring earnings growth. This was accomplished by regaining positive momentum in our LCD business and growing the earnings in our other segments. We also delivered on our commitment to enhance shareholder value by increasing the cash dividend and executing more than $1.5 billion in share repurchases. The company's performance was recognized by a 41% improvement in the year's share price, a result with which we are delighted.'
Fourth-Quarter Segment Results
Display Technologies segment core sales were $665 million*, a 5% decline from sales of $699 million* for the year-ago period. Core earnings were essentially even on a year-over-year basis.
Optical Communications segment sales were $605 million, a 12% increase from $540 million in last year's fourth quarter. The increase was driven by carrier network sales in North American, China, and European markets. However, these sales were a less-profitable mix than those occurring in 2012. The lower mix, along with production shutdowns in the fourth quarter, caused the segment's core earnings to decline 18% year over year.
Over the last decade, the business segment has evolved from being a manufacturer of optical fiber and cable, hardware and equipment into a comprehensive provider of industry-leading optical solutions across the broader communications industry. To better reflect the strategic focus of the business, Corning has changed the segment name to Optical Communications.
Specialty Materials segment sales were $285 million, a 29% decline from the very strong fourth-quarter performance of $399 million last year. This decline was primarily the result of significant customer inventory builds that occurred in the fourth quarter 2012. Core earnings for the segment were down 42% on a year-over-year basis, driven by lower Corning Gorilla Glass volumes.
Environmental Technologies segment sales were $238 million, a 9% increase over fourth-quarter results of $219 million a year ago. The increase was the result of improved light-duty automotive and diesel product sales in the quarter. Core earnings increased 124% on a year-over-year basis, led by improved manufacturing efficiency.
Life Sciences segment sales were $210 million, a 14% increase from $185 million in sales from a year ago. Core earnings increased 31% year over year. These increases were driven primarily by the company's recently acquired Discovery Labware business.
Core equity earnings from Dow Corning Corporation improved slightly from a year ago.
Core gross margin in the quarter was 40%*, a 2 percentage points decline from the year-ago period. The decline was the result of lower Gorilla Glass volume, as well as a weaker sales mix in the company's Optical Communications segment. Corning ended the year with $5.2 billion in cash and short-term investments. Capital spending for the year was $1 billion. The company spent $1.5 billion in cash on its share repurchase program in 2013. Upon completion of the Oct. 31, 2013 accelerated stock repurchase program, the company estimates that approximately 92 million shares will have been retired since April 2013.
'We have entered 2014 with confidence that we can continue building a bigger, stronger, and more agile Corning,' Weeks remarked. 'With our recently completed acquisition of the other 50% of Samsung Corning Precision, we expect to see direct financial and strategic benefits to Corning. We are broadening our ability to service our customers worldwide with flexible fusion glass manufacturing assets and improving operational efficiencies. The incremental profitability we expect to achieve with the consolidation of Samsung Corning Precision into our display business, coupled with a new $2 billion share repurchase program, should result in a 20% accretion to earnings per share on a fully diluted basis.'
Corning will provide investors with details on the company's 2014 outlook at its annual Investor Relations meeting in New York on Friday, Feb. 7. As a preview, the company provided the following expectations for the first quarter:
Corning anticipates that glass volume in its Display Technologies segment will be down slightly sequentially, in line with normal seasonality. The company expects LCD glass price declines to be higher than previous quarters. The price declines are not related to the SCP acquisition or a result of recent supply contract renewals. The company expects that price declines will return to moderate levels after the first quarter. Corning anticipates another year of growth in the LCD glass market in 2014, with retail demand up a mid-to-high single digit percentage, as measured in square feet. The company said that supply chain inventory levels remain healthy and industry glass supply appears aligned with overall demand.
In the Optical Communications segment, Corning anticipates first-quarter sales growth to be in the mid-teens on a percentage basis, a significant improvement over the first quarter last year.
For the Environmental Technologies segment, first-quarter sales should increase by a mid-single digit percentage on a year-over-year basis, driven by improvements in heavy-duty diesel products in China and Europe.
Specialty Materials segment sales are expected to be consistent on a year-over-year comparison in the first quarter, which is seasonally the slowest quarter each year. The company expects its Gorilla Glass volume to increase on a yearly basis in quarter one, and as the year progresses, be more in line with overall industry consumption of glass for devices.
Life Sciences segment sales should be comparable to those of a year-ago first quarter.
Corning anticipates its display segment volume growth will be driven by consumer demand for larger size televisions and increases in tablet computers this year. 'We are excited about opportunities to open new market applications for Gorilla Glass. There was a very positive reaction to our new Antimicrobial Corning Gorilla Glass at the Consumer Electronics Show earlier this month. And, we expect to expand Gorilla Glass into the automotive and architectural markets this year,' James B. Flaws, vice chairman and chief financial officer, said.
Flaws added, 'We have seen signs of improving demand for our diesel and automotive emissions control products in recent months, which should result in growth for our Environmental Technologies segment this year. And, our new optical communications offerings are improving wireless network capacity and establishing all-optical infrastructures to deliver the bandwidth required for the convergence of voice, video, and data into single network solutions. The recent increase in funding for the U.S. National Institute of Health should benefit our Life Sciences business this year.'
'We are optimistic that we will have another year of improved growth, profitability, and strong cash flow for Corning,' Flaws concluded.
Upcoming Investor Events
Corning will host investors and provide more information on its 2014 outlook at its annual investor meeting in New York on Friday, Feb. 7 beginning at 8 a.m. ET at Cipriani on 42nd Street. Corning will showcase products and technologies prior to the formal meeting at 9:30 a.m. ET. Attendees can register online at the company's investor relations website.
Also, company executives will be presenting at the Goldman Sachs Conference on Tuesday, Feb. 11 and the Morgan Stanley Technology, Media & Telecom Conference on March 4 in San Francisco.
Fourth-Quarter Conference Call Information
The company will host a fourth-quarter conference call on Tuesday, Jan. 28, at 8:30 a.m. ET. To participate, please call toll free (800) 230-1059 or for international access call (651) 291-0561 approximately 10-15 minutes prior to the start of the call. The password is 'QUARTER FOUR'. 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, Tuesday, Feb. 11, 2014. To listen, dial (800) 475-6701 or for international access dial (320) 365-3844. The access code is 314670. 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.
Attached File: CORNING INCORPORATED AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME
Media Relations Contact:
Daniel F. Collins
Investor Relations Contact:
Ann H.S. Nicholson