Company Anticipates Strong First-quarter Performance
CORNING, N.Y., Jan. 29 /Xinhua-PRNewswire/ -- Corning Incorporated (NYSE: GLW) on January 28 announced results for the fourth quarter and full year 2007, and its first-quarter 2008 guidance.
(Logo: http://www.prnasia.com/sa/200708141205.jpg )
Fourth-Quarter Highlights
-- Sales reached $1.58 billion, up 16% year over year.
-- Earnings per share were $0.45. Excluding special items, earnings
per share were $0.40.*
-- Display Technologies glass volume increased 31% and Samsung Corning
Precision Glass Co. Ltd.'s volume increased 38% year over year.
Both had volume increases of more than 6% over the third quarter.
-- Telecommunications sales increased 6% year over year and, as
expected, declined 9% sequentially. Year-over-year growth was
16%*, excluding the impact of the divestiture of the company's
submarine cabling business in the second quarter.
First-Quarter Outlook Highlights
-- Sales are expected in the range of $1.59 billion to $1.62 billion,
up more than 20% compared to first quarter last year.
-- Earnings per share, excluding special items, are expected in the
range of $0.41 to $0.43*, about 50% higher than last year's first
quarter.
-- Display LCD glass volume is expected to remain strong throughout
the quarter, and increase about 45% year over year.
Full-Year Highlights
-- Sales increased 13% to $5.86 billion.
-- Net income was $2.15 billion, or $1.34 per share. Excluding special
items, net income was $2.26 billion* or $1.41 per share*, a 27%
increase over 2006.
-- Display Technologies glass volume increased 38% year over year, and
pricing declined only 11%. Volume at Samsung Corning Precision
increased 39%, with pricing down 15%.
-- Environmental Technologies sales increased 23% year over year to
$757 million, with diesel product sales increasing more than 50%.
"Our strong fourth-quarter performance contributed to an outstanding year for Corning," Wendell P. Weeks, chairman and chief executive officer, said. "We delivered all-time records in gross margin percent, net income, EPS and operating cash flow in 2007. Our 38% annual volume growth in display and continued leadership in developing innovative solutions such as EAGLE XG(TM), Jade(TM) glass for advanced displays and Vita(TM), an OLED sealing solution for the flat panel industry, were highlights of the year."
"Additionally, we saw a greater than 50% increase in diesel product sales and a record level of automotive product sales in 2007. We also placed our first Epic(TM) Systems with pharmaceutical and research companies, and introduced ClearCurve(TM), our revolutionary new ultra-bendable fiber solution."
Quarter Four Financial Comparisons
Q4 Q3 % Q4 %
2007 2007 Change 2006 Change
Net Sales
in millions $1,582 $1,553 2% $1,369 16%
Net Income
in millions $717 $617 16% $646 11%
GAAP EPS $0.45 $0.38 18% $0.41 10%
Non-GAAP
EPS* $0.40 $0.38 5% $0.31 29%
Full-Year 2007 Financial Comparisons
2007 2006 % Change
Net Sales
in millions $5,860 $5,174 13%
Net Income
in millions $2,150 $1,855 16%
GAAP EPS $1.34 $1.16 16%
Non-GAAP
EPS* $1.41 $1.12 26%
*These are non-GAAP financial measures.
Fourth-Quarter Segment Results
Fourth-quarter sales for Corning's Display Technologies segment were $774 million, a 10% sequential increase, and a 25% increase over fourth-quarter 2006. The display segment results were positively influenced by continued strong global demand for LCD televisions and notebook computers and positive foreign exchange rate movements in the fourth quarter. Sequential price declines were moderate again this quarter.
Telecommunications segment sales for the quarter were $430 million, a 9% decline sequentially. The sequential decline was the result of normal seasonal slowdowns.
Environmental Technologies segment sales for the fourth quarter were $189 million, a 5% sequential decline but a 22% increase over the fourth quarter of 2006. The environmental segment continued to have stronger-than-expected automotive products sales. Corning's Life Sciences segment sales were $75 million for the quarter.
Corning's equity earnings from Dow Corning were $83 million for the quarter, compared to $81 million in the third quarter and $83 million a year ago.
First-Quarter Outlook
"We have good momentum in our display business heading into the first quarter," James B. Flaws, vice chairman and chief financial officer, said. "We believe first-quarter panel maker inventory levels are lower this year than last year. We expect panel makers to maintain high utilization rates throughout the first quarter, which will drive continued strong glass demand. Looking forward, we anticipate the LCD glass supply and demand balance will remain tight throughout the year, absent the impact of any potential downturn in the economy."
Corning expects first-quarter sales to be in the range of $1.59 billion to $1.62 billion and earnings per share, before special items, in the range of $0.41 to $0.43*, compared to $1.31 billion in sales and $0.28* in earnings per share, excluding special items, in the first quarter of 2007.
Business Highlights
-- First-quarter sales volume in the Display Technologies segment
is expected to be consistent with the fourth quarter as both
Corning and Samsung Corning Precision are expected to run at full
capacity. Corning anticipates continued moderate sequential price
declines. First-quarter sales are also expected to benefit from a
lower Japanese-yen-to-U.S.-dollar exchange rate.
-- Corning's Telecommunications segment sales are expected to increase
about 5% sequentially.
-- Environmental Technologies segment sales are expected to increase
about 5% sequentially due to strength in the European and Asian auto
market and improved heavy-duty diesel product sales.
-- Sales in the Life Sciences segment are expected to be up slightly.
-- Equity earnings from Dow Corning Corporation are expected to
decline 5% to 10% sequentially.
"We feel good about our strong start to 2008, and believe we will have excellent first-quarter performance," Flaws said. "As of today, we have not seen any significant impact from a potential slowing of the U.S. economy other than the slowdown in the trucking industry, which will negatively impact our diesel product sales. However, we are closely monitoring each of our businesses for any signs that would indicate a slowdown and will promptly notify investors of any significant change."
Corning will hold its annual investor relations meeting in New York on Friday, Feb. 8 at the Mandarin Oriental Hotel. Attendees can register online at the company's investor relations web site. Company executives will also be presenting at the Goldman Sachs Technology Investment Symposium in Las Vegas on Feb. 26.
Fourth-Quarter Conference Call Information
The company will host a fourth-quarter conference call on Jan. 28 at 8:30 a.m. ET. To access the call, dial (210) 234-0060 approximately 10-15 minutes prior to the start of the call. The password is QUARTER FOUR. The leader is SOFIO. To listen to a live audio webcast of the call, go to Corning's Web site at http://www.corning.com/investor_relations and follow the instructions. A replay of the call will begin at approximately 10:30 a.m. ET, and will run through 5 p.m. ET, Monday, Feb. 11. To listen, dial (203) 369-2019. No pass code is required. The audio webcast will be archived for one year following the call.
Presentation of Information in this News Release
Non-GAAP financial measures are indicated with an ASTERISK and not in accordance with, or an alternative to, GAAP. Corning's non-GAAP net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company's non-GAAP measures exclude adjustments to asbestos settlement reserves required by movements in Corning's common stock price, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies, and gains from discontinued operations. The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company's underlying performance. These non-GAAP measures are reconciled on the company's Web site at http://www.corning.com/investor_relations and accompany this news release.
About Corning Incorporated
Corning Incorporated ( http://www.corning.com ) is the world leader in specialty glass and ceramics. Drawing on more than 150 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.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes in global economic and political conditions; currency fluctuations; product demand and industry capacity; competition; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; changes in the mix of sales between premium and non-premium products; new plant start-up costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political instability 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; stock price fluctuations; and adverse litigation or regulatory developments. Additional risk factors are identified 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.
