Record Corning® Gorilla® Glass volume and accelerating
Optical Communications growth provide momentum for 2017
CORNING, N.Y.;
JANUARY 24, 2017 - Corning Incorporated (NYSE: GLW) today
announced results for fourth-quarter and full-year 2016.
News Summary:
- Fourth-quarter results provided a strong finish
to 2016: Q4 GAAP EPS of $1.47, up 765%, and core EPS of $.50, up
47%, year over year; Q4 GAAP and core sales up 11% and 6%
respectively, year over year
- Business segment performance highlights included
record Corning® Gorilla® Glass volume, driven by rapid adoption of
Gorilla® Glass 5; acceleration of Optical Communications growth;
and continued moderation in price declines in Display
Technologies
- Significant progress since introducing the
Strategy and Capital Allocation Framework, returning $6 billion to
shareholders and advancing focused portfolio initiatives
- Year-over-year sales, net income, and EPS growth
expected in the first quarter of 2017
"Corning delivered outstanding fourth-quarter
results, continuing the momentum that began earlier in the year,"
said Wendell P. Weeks, chairman, chief executive officer and
president. "Our very strong finish to the year was highlighted by
year-over-year core sales growth of 6%, core earnings growth of 24%
and core EPS growth of 47%. We are encouraged by this strength, and
expect growth in these year-over-year measures in the first quarter
of 2017."
Strategy and Capital Allocation
Framework Progress
Corning's Strategy and Capital Allocation Framework outlines the
company's 2016-2019 leadership priorities. Under the Framework,
Corning plans to deliver more than $12.5 billion to shareholders
while investing $10 billion in growth opportunities.
Since the Framework was announced, the company has
achieved key milestones including the return of $6 billion to
shareholders by increasing the dividend 12.5% and repurchasing 22%
of its outstanding shares; and completing the realignment of Dow
Corning Corporation, which unlocked tremendous value for
shareholders.
"As we enter the second year under our Framework,
the strategic and financial benefits of Corning's focused portfolio
are even more apparent," said Weeks. "We're particularly pleased to
see our market-access platforms continue to evolve as we
anticipated. Progress on our initiatives include the rapid adoption
rate of Gorilla® Glass 5; new platform wins from major OEMs for gas
particulate filters; and customer commitments that support
long-term growth opportunities in Optical Communications. The
strong response to our cutting-edge glass innovations at the recent
Consumer Electronics Show is yet another illustration."
"In 2017, we will continue to advance the
objectives of our Strategy and Capital Allocation Framework," Weeks
added. "We expect to increase the value of Corning products used on
mobile devices, accelerate growth in Optical Communications,
commercialize gas particulate filters, and make advancements in
pharmaceutical glass and Gorilla Glass for Automotive. Corning's
focused portfolio positions the company well for the
long-term."
Fourth-Quarter and Full-Year 2016
Results and Comparisons
(In millions, except per-share amounts)
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net
Sales |
$2,476 |
$2,507 |
(1%) |
$2,231 |
11% |
$9,390 |
$9,111 |
3% |
GAAP Net
Income |
$1,572 |
$284 |
454% |
$224 |
602% |
$3,695 |
$1,339 |
176% |
GAAP
EPS |
$1.47 |
$0.26 |
465% |
$0.17 |
765% |
$3.23 |
$1.00 |
223% |
Core
Sales* |
$2,551 |
$2,548 |
- |
$2,402 |
6% |
$9,710 |
$9,800 |
(1%) |
Core
Earnings* |
$534 |
$466 |
15% |
$429 |
24% |
$1,774 |
$1,882 |
(6%) |
Core
EPS* |
$0.50 |
$0.42 |
19% |
$0.34 |
47% |
$1.55 |
$1.40 |
11% |
*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. Core performance
metrics (non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen and Korean won foreign exchange rates, as well as
other items that do not reflect ongoing operations of the company.
Corning does not forecast the movement of the Japanese yen against
the U.S. dollar or other items that do not reflect ongoing
operations. As a result, the company is unable to provide guidance
on a GAAP basis. See "Use of Non-GAAP Financial Measures" for
details on core performance measures.
Segment Results and
Outlook
Display Technologies:
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net
Sales |
$830 |
$902 |
(8%) |
$732 |
13% |
$3,238 |
$3,086 |
5% |
GAAP Net
Income |
$243 |
$279 |
(13%) |
$243 |
- |
$935 |
$1,095 |
(15%) |
Core
Sales* |
$904 |
$943 |
(4%) |
$903 |
- |
$3,556 |
$3,774 |
(6%) |
Core
Earnings* |
$276 |
$270 |
2% |
$234 |
18% |
$1,006 |
$1,075 |
(6%) |
NOTE: In all segments except the
Display Technologies segment, core net sales are consistent with
GAAP net sales. Because a significant portion of revenues and costs
in the Display Technologies segment are denominated in Japanese yen
and Korean won respectively, this segment's net sales and costs are
adjusted to remove the impact of translating yen and won into U.S.
dollars.
In the fourth quarter, Display Technologies
reported strong results, with core sales of $904 million,
consistent with a year ago, and core earnings of $276 million, up
18%. Full-year core sales were $3.6 billion, and core earnings were
$1 billion.
For full-year 2016, the percentage rate of growth
in the LCD glass market and demand for Corning's glass was in the
mid-single digits. Corning's sequential glass price declines
remained moderate throughout 2016.
For full-year 2017, Corning expects the rate of
growth in both retail market and glass demand to be in the
mid-single digit percentages. In the first quarter of 2017,
the company expects Corning's volume to increase by mid-teen
percentage year over year, and decline by mid-single digit
percentage sequentially. The company expects an overall favorable
LCD glass price environment for the full year, with price declines
more moderate than in 2016.
Optical Communications:
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net
Sales |
$819 |
$795 |
3% |
$736 |
11% |
$3,005 |
$2,980 |
1% |
GAAP Net
Income |
$67 |
$84 |
(20%) |
$33 |
103% |
$245 |
$237 |
3% |
Core
Earnings* |
$87 |
$98 |
(11%) |
$47 |
85% |
$297 |
$281 |
6% |
Fourth-quarter 2016 sales in Optical
Communications rose 11% and core earnings rose 85% over 2015. Sales
growth of fiber-to-the-home solutions in North America, along with
improved manufacturing performance, contributed to the higher
year-over-year profitability. Full-year 2016 sales were $3 billion
and core earnings were $297 million.
In the first quarter of 2017, year-over-year
Optical Communications sales growth is expected to be at least 25%.
Full-year 2017 sales are expected to increase by a low-teens
percentage over 2016.
Environmental
Technologies:
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net Sales |
$245 |
$264 |
(7%) |
$254 |
(4%) |
$1,032 |
$1,053 |
(2%) |
GAAP Net Income |
$27 |
$35 |
(23%) |
$29 |
(7%) |
$133 |
$161 |
(17%) |
Core Earnings* |
$27 |
$35 |
(23%) |
$29 |
(7%) |
$136 |
$161 |
(16%) |
In Environmental Technologies, fourth-quarter and
full-year sales were down slightly year-over-year. Sales of
light-duty substrates in both periods were strong, driven by global
automotive demand, but demand for heavy-duty diesel products
remained weak. Full-year 2016 sales were $1 billion and core
earnings were $136 million.
For the first quarter of 2017, year-over-year
segment sales are expected to be consistent to down slightly.
Full-year 2017 sales are expected to be consistent to up slightly
from last year with continued strength in the automotive market and
lower demand for heavy-duty diesel products. Sales of the company's
new gas particulate filters are expected to begin during the second
half of 2017.
Specialty Materials:
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net
Sales |
$336 |
$295 |
14% |
$275 |
22% |
$1,124 |
$1,107 |
2% |
GAAP Net
Income |
$68 |
$42 |
62% |
$39 |
74% |
$174 |
$167 |
4% |
Core
Earnings* |
$65 |
$44 |
48% |
$44 |
48% |
$189 |
$178 |
6% |
Specialty Materials fourth-quarter 2016 sales rose
22% over last year, led by record Gorilla Glass volume, while core
earnings were up 48%. Full-year 2016 sales were $1.1 billion and
core earnings were $189 million.
In the first quarter of 2017, year-over-year
segment sales growth is expected to be in the high-teen
percentages. The company expects full-year 2017 segment sales to
increase, with the rate of growth dependent on the timing and
extent of customers deploying Gorilla Glass 5 and other Corning
innovations.
Life Sciences:
|
Q4 2016 |
Q3 2016 |
% change |
Q4 2015 |
% change |
Full-year 2016 |
Full-year 2015 |
% change |
GAAP Net
Sales |
$206 |
$214 |
(4%) |
$202 |
2% |
$839 |
$821 |
2% |
GAAP Net
Income |
$13 |
$16 |
(19%) |
$9 |
44% |
$58 |
$61 |
(5%) |
Core
Earnings* |
$17 |
$21 |
(19%) |
$12 |
42% |
$77 |
$73 |
5% |
In Life Sciences, sales were up year over year for
both fourth-quarter and full-year 2016, and core earnings growth
outpaced that of sales. The Life Sciences segment is expected to
have low-single-digit percentage sales growth for first-quarter and
full-year 2017, ahead of forecasted market growth rates.
Upcoming Investor
Events
On Feb. 14, Corning will attend the Goldman Sachs Technology and
Internet Conference to be held in San Francisco at the Palace
Hotel. Corning also will attend the Morgan Stanley Technology,
Media & Telecom Conference on Feb. 28 in San Francisco at the
Palace Hotel.
Corning will host its annual investor meeting in
New York on Friday, June 16 at CURRENT at Chelsea Piers.
Fourth-Quarter Conference Call
Information
The company will host a fourth-quarter conference call on Tuesday,
January 24, at 8:30 a.m. EDT. To participate, please call toll free
(800) 230-1085 or for international access call (612) 288-0329
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,
click "Events" and follow the instructions. A replay will be
available beginning at 11 a.m. EDT and will run through 5 p.m. EDT,
Tuesday, February 7. To listen, dial (800) 475-6701 or for
international access dial (320) 365-3844. The access code is
413658. 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 the Investor Relations page
and clicking "Financial Highlights" under the "Performance" tab.
These reconciliations also accompany this news release.
Caution Concerning
Forward-Looking Statements
This press release contains "forward-looking statements" - that is,
statements related to future events that by their nature address
matters that are, to different degrees, uncertain. These
forward-looking statements relate to, among other things, the
company's future operating performance, the company's share of new
and existing markets, the company's revenue and earnings growth
rates, the company's ability to innovate and commercialize new
products, and the company's implementation of cost-reduction
initiatives and measures to improve pricing, including the
optimization of the company's manufacturing capacity.
In this context, forward-looking statements often
contain words such as "will," "believe," "anticipate," "expect,"
"intend," "plan," "seek," "see," "would," and "target". Although
the company believes that these forward-looking statements are
based upon reasonable assumptions regarding, among other things,
current estimates and forecasts, general economic conditions, its
knowledge of its business, and key performance indicators that
impact the company, actual results could differ materially. The
company does not undertake to update forward-looking statements.
Some of the risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed in or
implied by the forward-looking statements include, but are not
limited to: competitive products and pricing; availability and
costs of critical components and materials; new product development
and commercialization; order activity and demand from major
customers; unanticipated disruption to equipment, facilities, or
operations; facility expansions and new plant start-up costs; our
ability to pace capital spending to anticipated levels of customer
demand; the amount and timing of our cash flows and earnings and
other conditions, which may affect our ability to pay our quarterly
dividend at the planned level or to repurchase shares at planned
levels; our capital allocation plans, as such plans may change
including with respect to the timing and size of share repurchases,
acquisitions, joint ventures, dispositions and other strategic
actions; and the effectiveness of our risk management
framework.
For a complete listing of risks and other factors,
please reference the risk factors and forward-looking statements
described in the annual reports on Form 10-K and quarterly reports
on Form 10-Q.
Digital Media
Disclosure
In accordance with guidance provided by the SEC regarding the use
of company websites and social media channels to disclose material
information, Corning Incorporated ("Corning") wishes to notify
investors, media, and other interested parties that it intends to
use its website
(http://www.corning.com/worldwide/en/about-us/news-events.html) to
publish important information about the company, including
information that may be deemed material to investors. The list of
websites and social media channels that the company uses may be
updated on Corning's media and website from time to time. Corning
encourages investors, media, and other interested parties to review
the information Corning may publish through its website and social
media channels as described above, in addition to the company's SEC
filings, press releases, conference calls, and webcasts.
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:
M. Elizabeth Dann
(607)
974-4989
dannme@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Corning Incorporated Q4 2016
Financials
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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
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