Corning Incorporated : Corning Announces Fourth-Quarter and Full-Year Financial Performance Annual sales largest in company history 2012 Corning^® Gorilla^® Glass sales exceed $1 billion CORNING, N.Y. - Corning Incorporated (NYSE: GLW) today announced its results for the fourth quarter and full year of 2012. Fourth-Quarter Highlights *Sales were $2.15 billion, a 14% year-over-year increase. The quarter performance reflects the largest quarterly sales in Corning history. *Earnings per share were $0.34,* excluding special items, the company's first year-over-year quarterly improvement since 2010; GAAP earnings per share were $0.19. *Display Technologies total glass volume from Corning's wholly owned business and Samsung Corning Precision Materials Co., Ltd. (SCPM) increased sequentially by a high-single digit percentage, reflecting overall improved market demand throughout the quarter. Price declines in Corning's wholly owned business were slightly higher than in the third quarter, as expected. For SCPM, price declines were consistent with the previous quarter. *Specialty Materials sales were up 68% on a year-over-year basis and 10% sequentially, driven by the continued strength of Corning^® Gorilla^® Glass. *Telecommunications sales improved 10% over the year-ago period and 3% sequentially. Full-Year Highlights *Sales were $8.01 billion, a 2% increase over $7.9 billion last year, representing a sales record for the company. *Excluding special items, earnings per share for the year were $1.29* compared to last year's $1.76*. GAAP earnings per share for the year were $1.15 versus $1.77 last year. *Free cash flow for the year was $579 million*. *These are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tablesattached tothis news release, as well as on the company's investor relations website. Quarter-Four Financial Comparisons Q4 2012 Q4 2011 % Change Net Sales in millions $2,146 $1,887 14% Net Income in millions $283 $491 (42%) Non-GAAP Net Income $498 $513 (3%) in millions* GAAP EPS $0.19 $0.31 (39%) Non-GAAP EPS* $0.34 $0.33 3% Full-Year Financial Comparisons 2012 2011 % Change Net Sales in millions $8,012 $7,890 2% Net Income in millions $1,728 $2,805 (38%) Non-GAAP Net Income $1,940 $2,789 (30%) in millions* GAAP EPS $1.15 $1.77 (35%) Non-GAAP EPS* $1.29 $1.76 (27%) *These are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tablesattached tothis news release, as well as on the company's investor relations website. "Corning made good progress in 2012, despite some challenging economic conditions and changing market environments," Wendell P. Weeks, chairman, chief executive officer and president, said. "We set a record for annual sales performance and increased our dividend by 20 percent. And we advanced a number of new technological innovations, which we believe will open additional markets for our products in the future." "We made major progress on our goal of stabilizing Display Technologies' performance, primarily through moderating price declines. Corning Gorilla Glass sales exceeded $1 billion for the year, a great example of another successful Corning innovation," Weeks said. Fourth-Quarter Segment Results Sales in the Display Technologies segment were $800 million, an increase of approximately 3% over the year-ago quarter. Telecommunications segment sales were $540 million, a 10% year-over-year increase. The quarter's results were helped by stronger fiber-to-the-home sales, particularly to Australia's national broadband network project; excellent demand for Corning Mobile Access wireless products; and optical fiber sales in China. Specialty Materials segment sales were $399 million, a 68% year-over-year increase. The quarter performance was a sales record for the business, ignited by consumer sales of handheld and IT devices containing Corning Gorilla Glass, which can now be found on more than 1 billion devices worldwide. Environmental Technologies segment sales were $219 million, a decline of 6% from its performance a year ago. The decline was slightly higher than the company's expectations, the result of reduced demand for light-duty and heavy-duty diesel products. Life Sciences segment sales were $185 million, a 29% increase year over year. The growth was driven primarily by increased sales from the recent acquisition of the majority of the Discovery Labware business. Dow Corning Corporation's gross equity earnings, excluding special items, were $33 million,* a decline of 33% on a year-over-year basis and 13% sequentially. The primary reason for the decline was weak results in the sales and production of polysilicon for the solar industry. Sales of polysilicon for the semiconductor industry remain stable. Corning's GAAP equity loss from Dow Corning Corporation was $54 million. Gross margin in the quarter was 42%, compared to 44% at this time a year ago. Corning ended the year with $6.1 billion in cash and short-term investments. Capital spending for the year was $1.8 billion. Corning's effective tax rate for the year was 18.4%. In the quarter, the company had a number of non-GAAP special items, primarily related to restructuring and asset impairments across the company's business segments, and at Samsung Corning Precision Materials and Dow Corning. Looking Forward James B. Flaws, vice chairman and chief financial officer, said, "We are not without challenges in 2013 as we continue to face an uncertain global economy, but we enter the year with prospects for growth in Specialty Materials, Telecommunications, Environmental Technologies and Life Sciences. In our LCD glass business, we expect our market share to be stable, and price declines to be moderate." Flaws will provide investors with details on the company's 2013 outlook at its annual Investor Relations meeting in New York on Friday, Feb. 8. As a preview, he provided the following highlights: *In the Display Technologies segment, Corning expects first-quarter total glass volume from its wholly owned display business and Samsung Corning Precision Materials to increase on a year-over-year basis, but to decline sequentially by mid-single digits. This volume decline is in line with previous first-quarter seasonal declines. Corning's LCD glass volume is anticipated to grow for the full year. Price declines in the quarter for our wholly owned business are expected to be more moderate versus the previous quarter. SCPM's price declines should be similar to last quarter. *Telecommunications segment sales in the first quarter are expected to increase on a year-over-year basis. A rise in demand for Corning's optical fiber and cable, combined with growth of fiber-to-the-home sales in Australia, and enterprise networks solutions, should bring about a strong year for the company's Telecommunications segment. *Specialty Materials segment sales are expected to decline in the first quarter, which is typically the lowest quarter of the year for this business. For the full year, the company is anticipating double-digit market growth for Gorilla Glass, driven by its continued popularity as a cover glass for smartphones and tablets, and the emergence of touch technology on notebook computers. *Environmental Technologies first-quarter results are expected to decline from last year's record quarterly sales. For the full year, the company anticipates that the worldwide auto and heavy-duty diesel truck markets should grow year over year. *In the Life Sciences segment, sales are expected to increase significantly year over year for both the first quarter and full year, benefiting from its recent acquisition. Flaws pointed out two external factors that could negatively affect Corning this year. "The current unfavorable solar industry conditions are expected to continue for Dow Corning's subsidiary, Hemlock Semiconductor Group, and could worsen if trade rulings on the importation of solar polysilicon into China are negative. These problems are likely to impact Corning's equity earnings for the year," he said. "The depressed solar industry demand led Dow Corning to impair certain assets of the Hemlock business in the fourth quarter of 2012, and if performance deteriorates, conditions could lead to further restructurings and impairments in 2013," he added. "Corning believes steps are available to mitigate the impact of the solar industry problems as the year progresses. Hemlock prepared for the potentially negative volatility in the solar market by requiring strong and firm contracts with customers and getting customer pre-payments against these contracts. If necessary, Hemlock's management is prepared to take action to enforce its customers' contractual responsibilities," Flaws said. "Among the many macro-economic uncertainties we face is the valuation of the Japanese yen versus the U.S. dollar," Flaws said. "While beyond our control, the recent sharp depreciation of the yen could negatively impact our reported net earnings if the present level holds or the currency depreciates further in 2013. We are evaluating ways to potentially mitigate the impact of any further weakening in the yen-to-dollar exchange rate." "We have strong business momentum entering this year," Flaws said. "We introduced our third version of Gorilla Glass earlier this month at the International Consumer Electronics Show in Las Vegas, and the acceptance was overwhelmingly positive. The expanding popularity of touch-enabled devices should present even greater opportunities for our market-leading cover glass solution." Flaws also noted that Corning has the potential to create several new high-growth market opportunities with Corning^® Willow(TM) Glass, an ultra-slim, flexible glass that will enable next-generation displays, touch screens and other devices; and with its anti-microbial glass that reduces and kills drug-resistant bacteria and viruses. Corning also sees significant future growth opportunities in the telecommunications market with rapidly expanding demand for mobile technologies and optical fiber network expansions in developing markets. "The positive market trends in our major businesses should drive demand for all of Corning's existing and emerging technologies, creating terrific opportunities for us," Flaws concluded. Upcoming Investor Events Corning will host investors and provide more information on its 2013 outlook at its annual investor meeting in New York on Friday, Feb. 8 beginning at 8 a.m. ET at Cipriani on 42^nd Street. Corning will showcase products and technologies prior to and following the formal meeting at 9 a.m. ET. Attendees can register online at the company's investor relations website. Also, company executives will be presenting at the Goldman Sachs Technology and Internet Conference in San Francisco on Feb. 12, and the Morgan Stanley Technology, Media & Telecom Conference on Feb. 26, also in San Francisco. Fourth-Quarter Conference Call Information The company will host a fourth-quarter conference call on Tuesday, Jan. 29 at 8:30 a.m. ET. 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 password is 'QUARTER FOUR'. The host is 'NICHOLSON'. To listen to a live audio webcast of the call, go to Corning's Web site at www.corning.com/investor_relations and click Investor Events on the left. A replay will be available beginning at 10:30 a.m. ET and will run through 5 p.m. ET, Tuesday, Feb. 12, 2013. To listen, dial (800) 475-6701 or for international access dial (320) 365-3844. The access code is 276093. 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 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, 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. Reconciliation of these non-GAAP measures can be found on the company's website by going to www.corning.com/investor_relations and clicking Financial Reports on the left. Reconciliation also accompanies 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 thefinancial 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 fluctuationsandchanges in the mix of sales between premium and non-premium products;new plant start-upor restructuringcosts; 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 otherrisk factors aredetailedin 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. Media Relations Contact: Daniel F. Collins (607) 974-4197 email@example.com Investor Relations Contact: Ann H. S. Nicholson (607) 974-6716 firstname.lastname@example.org Q4 2012 Financial Tables ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Corning Incorporated via Thomson Reuters ONE HUG#1673735
Corning Incorporated : Corning Announces Fourth-Quarter and Full-Year Financial Performance
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