Core EPS grows 12% year over year
Optical Communications leads
second-quarter performance
CORNING, N.Y., JULY 28,
2015 - Corning Incorporated (NYSE: GLW) today announced
its results for the second quarter of 2015.
Second-Quarter 2015 Financial
Comparisons
(In millions, except percentages and per-share
amounts)
|
Core Performance* |
|
Q2 2015 |
Q2 2014 |
% Change |
Core Net Sales |
$2,517 |
$2,512 |
-- |
Core Earnings |
$522 |
$487 |
7% |
Core EPS |
$0.38 |
$0.34 |
12% |
|
GAAP |
|
Q2 2015 |
Q2 2014 |
% Change |
Net Sales |
$2,343 |
$2,482 |
(6)% |
Net Income |
$496 |
$169 |
193% |
EPS |
$0.36 |
$0.11 |
227% |
*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 website. Additional non-GAAP reconciliations for the
years 2013 and 2014 have been provided on our website, and they
detail the change in core gross margin, core selling, general and
administrative expenses, and core research, development, and
engineering expenses due to the change in Corning's
constant-Japanese yen rate from ¥93 to ¥99 beginning in the first
quarter of 2015. Core performance metrics (non-GAAP) are adjusted
to exclude the impact of changes in Japanese yen foreign exchange
rate, as well as other items that do not reflect ongoing operations
of the company. See "Use of Non-GAAP Financial Measures" section of
attached Form 8-K for details on core performance
measures.
"We began 2015 with a clear set of priorities to
drive Corning's continued success. Our second-quarter performance
clearly demonstrates that we are executing to our plan," Wendell P.
Weeks, chairman, chief executive officer and president, said. "Our
businesses are delivering strong results as evidenced by the 7
percent year-over-year core earnings growth. And our share
repurchase program has leveraged the earnings growth into 12
percent core EPS growth. Our first-quarter acquisitions in the
Optical Communications segment are paying off, especially in the
growing hyperscale data centers market. We also announced an
agreement to acquire a business that will enable innovation
opportunities in the pharmaceutical glass packaging market.
Finally, we're continuing our commitment to return cash to
shareholders through a new $2 billion share repurchase
program."
Remarking on the company's second-quarter
performance, James B. Flaws, vice chairman and chief financial
officer, said, "We are very pleased with our excellent business
results in the quarter. Our overall performance was in line with
our expectations. Without the impact of the strengthening U.S.
dollar, our results would have been even stronger - with core
quarterly sales, earnings and EPS up 3%, 11% and 15%,
respectively."
"Our Optical Communications segment had a
spectacular quarter with exceptionally strong demand for
fiber-to-the-home and data center solutions. We believe our full
suite of optical solutions gives us significant competitive
advantages in the fastest growing segments of these markets. And
our strategic acquisitions are providing improved market access and
broader customer offerings."
Second-Quarter Segment
Performance
-
Display Technologies: Core
sales were $963 million*, with sequential glass volume growth of a
low single-digit percentage, as expected. Sequential LCD glass
prices declined moderately, and in line with expectations. Core
earnings for the quarter were $290 million* versus $300 million* in
the second quarter last year.
-
Optical Communications:
Sales were $800 million, a 17% increase from $686 million for the
comparable period a year ago. Core earnings for the quarter were
$91 million*, a 44% increase from $63 million* a year
ago.
-
Environmental Technologies:
Sales were $260 million versus $285 million, a 9% decrease on a
year-over-year basis, driven primarily by currency exchange rates.
Core earnings were $46 million*, in line with last year's second
quarter.
-
Specialty Materials: Sales
were $272 million versus $298 million, a 9% decline on a
year-over-year basis, driven primarily by lower sales of advanced
optics products, as anticipated. A strong mid-teens percentage
growth in Corning® Gorilla® Glass volume, combined with improved
efficiencies, kept core earnings at $44 million*, in line with last
year's second quarter.
-
Life Sciences: Sales were
$211 million versus $223 million last year, a 5% year-over-year
decline, driven by currency exchange rates.
-
Core equity earnings from Dow
Corning Corporation of $63 million* met expectations.
-
Core gross margin for the quarter was 45%*, a 1%
increase over the year-ago period.
Looking Forward
Corning provided the following expectations for
its business segments in the third quarter of 2015:
- Display Technologies: LCD
glass volume is expected to increase by a low single-digit
percentage sequentially. The company expects LCD price declines to
remain at a moderate level in the third quarter, which would be the
fifth consecutive quarter of moderate price declines.
Corning updated its view of the retail LCD glass
market, adjusting expectations for IT and TV unit demand downward.
Corning now expects the 2015 worldwide LCD glass market area growth
to be in the 6% to 7% range. The forecasted reduction in IT demand
reflects expectations that the second-quarter weakness may continue
for the remainder of the year. The TV unit forecast reductions are
mainly in Western Europe and Latin America, where demand is
expected to remain weak. The company also adjusted demand in China
slightly. However, overall television screen-size growth is
tracking higher than anticipated, somewhat offsetting the
forecasted unit reductions.
The company believes the longer-term outlook for
TV demand remains excellent, driven by new formats such as 4K TV
and the replacement rate of older sets. The company also believes
that its moderate price declines will continue beyond the third
quarter.
- Optical Communications:
Corning is increasing its expectation for optical communications
sales for the year, as demand for the company's FTTH and data
center solutions remains high. Third-quarter and full-year sales
are expected to be up in the mid-teen percentage range versus last
year.
- Specialty Materials: Gorilla
Glass volume is expected to be up by a high single-digit percent
sequentially, and consistent with last year's exceptionally strong
third-quarter performance. The company continues to see strong
adoption of its new Gorilla Glass 4 product and also announced its
first smartphone customer for Antimicrobial Corning® Gorilla®
Glass. On a year- over-year basis, third-quarter sales in the
segment are expected to be down in the upper single-digit percent
range, driven by the cyclical slowdown in the semiconductor
industry.
- Environmental Technologies and
Life Sciences: Sales in the Environmental Technologies and Life
Sciences segments are expected to be down slightly in the third
quarter from the prior year, driven by the impact of changes in the
euro-U.S. dollar exchange rate.
"We feel very good about Corning and the exciting
market opportunities in each of our business segments," Flaws
remarked. "Our advantaged products, leading technological
innovation, and lowest cost position place us ahead of our
competition. It is clear that our strategy is working: We are
growing earnings, leveraging innovation for future growth, and
bringing value to our investors through dividends and share
repurchases."
Second-Quarter Conference Call
Information
The company will host a second-quarter conference call at 8:30 a.m.
(EST) Tuesday, July 28. To participate, please call toll free (800)
230-1074; or for international access call (612) 234-9960
approximately 10-15 minutes prior to the start of the call. 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 on "Events". A replay will be available beginning at 11 a.m.
(EST) and will run through 5 p.m. (EST), Tuesday, Aug. 11. To
listen, dial (800) 475-6701, or for international access dial (320)
365-3844. The access code is 363576. 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 (www.corning.com) is one of the world's leading innovators
in materials science. For more than 160 years, Corning has applied
its unparalleled expertise in specialty glass, ceramics, and
optical physics to develop products that have created new
industries and transformed people's lives. Corning succeeds through
sustained investment in R&D, a unique combination of material
and process innovation, and close collaboration with customers to
solve tough technology challenges. Corning's businesses and markets
are constantly evolving. Today, Corning's products enable diverse
industries such as consumer electronics, telecommunications,
transportation, and life sciences. They include damage-resistant
cover glass for smartphones and tablets; precision glass for
advanced displays; optical fiber, wireless technologies, and
connectivity solutions for high-speed communications networks;
trusted products that accelerate drug discovery and manufacturing;
and emissions-control products for cars, trucks, and off-road
vehicles.
Media Relations
Contact:
Daniel F. Collins
(607)
974-4197
collinsdf@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Q2 2015 Financials
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Corning Incorporated via Globenewswire
HUG#1941593
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