CORNING, N.Y., Oct. 25 /Xinhua-PRNewswire/ -- Corning Incorporated (NYSE: GLW) on Oct 24, 2007 announced results for the third quarter of 2007.
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Third-Quarter Highlights
-- Sales reached $1.55 billion, up 21% year-over-year.
-- Earnings per share (both GAAP and non-GAAP) were $0.38, better
than the company’s guidance of $0.34 to $0.37 and significantly
better than last year.
-- Display Technologies’ glass volume increased 15% and Samsung
Corning Precision’s volume increased 14% compared to quarter
two. Price declines in the quarter were in line with previous
quarters.
-- Sequentially, telecommunications sales increased 8% (10%*
excluding the impact of the divestiture of the company’s
submarine cabling business in the second quarter).
Fourth-Quarter Outlook Highlights
-- Sales are expected in the range of $1.50 billion to $1.55
billion.
-- EPS is expected in the range of $0.36 to $0.38 before special
items.*
-- Display volume is expected to be up 2% to 5% sequentially, and
consistent with the overall glass market growth.
-- Telecommunications sales are expected to decline about 10%
sequentially, in line with normal seasonal patterns.
Wendell P. Weeks, chairman and chief executive officer, said, "Corning delivered a robust third quarter with excellent performance in our Display Technologies and Telecommunications segments. As we expected, telecommunications sales improved in the quarter."
Quarter Three Financial Comparisons
Q3 2007 Q2 2007 % Change Q3 2006 % Change
Net Sales in millions $1,553 $1,418 +10% $1,282 +21%
Net Income in millions $ 617 $ 489 +26% $ 438 +41%
GAAP EPS $ 0.38 $ 0.30 +26% $ 0.27 +41%
Non-GAAPEPS* $ 0.38 $ 0.34 +12% $ 0.28 +36%
*These 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 investor relations website.
Overview of Business Segment Results
Third-quarter sales for Corning’s Display Technologies segment were $705 million, a 16% sequential increase, and a 39% increase over the third quarter 2006. The display segment results were also positively impacted by a favorable U.S.-dollar-to-Japanese-yen exchange rate in the quarter.
Telecommunications segment sales in the third quarter were $472 million, an 8% sequential increase and a 4% increase over the third quarter 2006. Excluding the impact of the divestiture of the submarine cabling business, sales were up 10%* over the second quarter and 13%* over the third quarter 2006. The strong third-quarter performance was driven by growth throughout the segment, including increased demand for fiber-to-the-premises (FTTP) products and private network projects. During the third quarter, the company began shipments to a new European FTTP customer.
Environmental Technologies segment sales in the third quarter were $198 million, a 4% sequential increase and a 29% increase over the third quarter 2006. Corning’s Life Sciences segment had sales of $78 million, remaining even with last quarter, and 15% higher than a year ago.
Corning’s equity earnings from Dow Corning were $81 million in the third quarter, compared to $88 million in the second quarter and $78 million a year ago. Third-quarter equity earnings include a $4 million nonrecurring tax charge.
The company’s third-quarter results included two special items: a credit of $16 million related to the Pittsburgh Corning Corporation settlement and $18 million of restructuring charges in equity earnings from Samsung Corning Company, Ltd. Samsung Corning is Corning’s 50-percent owned equity venture in Korea which manufactures glass panels and funnels for cathode ray tubes for conventional televisions and computer monitors.
Fourth-Quarter 2007 Outlook
"The overall display market appears healthy heading into the fourth quarter. Retail market indicators continue to point toward a strong consumer holiday buying season for electronic goods such as LCD televisions, laptop computers and flat screen monitors. We currently see no evidence of credit concerns in the U.S. impacting consumers’ purchasing decisions," James B. Flaws, vice chairman and chief financial officer, said.
Business Segment Highlights
-- Sequential LCD volume in both the company’s wholly owned
business and at Samsung Corning Precision is expected to
increase in the range of 2% to 5%. Corning’s wholly owned
business is on track to increase volume 37% to 38% for the
full year. To meet this level of demand, the company anticipates
running its operations at full capacity in the fourth quarter.
Sequential price declines are again expected to be in line with
previous quarters. Corning is assuming a U.S.-dollar-to-Japanese-yen
exchange rate of 116 for quarter four.
-- Corning’s Telecommunications segment sales are expected to
increase about 5% (about 15%* excluding the impact of
divestitures) versus the fourth quarter 2006, and are on track
to grow about 3% (about 10%* excluding the impact of divestitures)
this year.
-- Environmental Technologies segment sales are expected to decline
about 10% sequentially, and increase about 15% versus the fourth
quarter 2006.
-- Sales for the Life Sciences segment are expected to decline
slightly on a sequential basis and be even with the fourth
quarter 2006.
"Compared to last year, we expect our fourth-quarter sales to be up about 10% to 13% and our EPS, before special items, to increase 16% to 22%.* These fourth-quarter results will bring our full-year sales growth to about 12% and our full-year EPS growth, before special items, to at least 21%* over 2006, bringing us another outstanding year of performance for Corning," Flaws said.
Looking forward to 2008, Flaws said that Corning’s current view is that the LCD glass market will expand by at least 400 million square feet, driven primarily by the growth of LCD television demand. This square-footage growth is similar to that experienced in both 2006 and 2007. Corning intends to continue its current pricing strategy in 2008.
Third-Quarter Conference Call Information
The company will host a third-quarter conference call on October 24 at 8:30 a.m. EDT. To access the call, dial (210) 234-0000 approximately 10-15 minutes prior to the start of the call. The password is QUARTER THREE. 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. EDT, and will run through 5 p.m. EST, Wednesday, November 7. To listen, dial (203) 369-1538. 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 accompanies 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.
