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Corning Inc. recently announced its results for the fourth quarter and full year 2009. Sales were $1.53 billion, an increase of 4% sequentially and 41% year-over-year. Earnings per share (EPS) were $0.47. Excluding special items, EPS was $0.44, a gain of 5% sequentially and 238% from a year ago. Display Technologies’ combined glass volume, including Corning’s wholly owned business and Samsung Corning Precision Glass Co., Ltd., increased 3% over a robust third quarter level and increased 86% year-over-year.
Gross margin was 42%, up 2% from the previous quarter, and greatly improved from last year’s gross margin of 28%. Equity earnings were $461 million, surpassing the previous quarter’s $418 million figure. Year-over-year equity earnings improved by 60%.
For the full 2009 year, sales were $5.4 billion vs. $5.9 billion a year ago, and EPS were $1.28. Excluding special items, EPS were $1.35, down 12% from a year ago. Display Technologies’ combined LCD glass volume increased 18% over a year ago. Volume in Corning’s base business declined 2% year-over-year, while SCP volume increased 35% for the same period.
“We began 2009 with a high degree of uncertainty and were not surprised with the slow start we saw in quarter one,” said Wendell P. Weeks, chairman and CEO. “Momentum picked up in the second quarter and our performance improved each quarter thereafter. The second half of the year was particularly strong for LCD glass demand, as consumers continued purchasing LCD televisions, laptop computers, and other electronic devices that use our glass. In addition, we saw a resurgence in demand for Corning’s emissions control products as the auto industry rebuilt supply. We were pleased by the continued strength of telecom sales in China throughout the year. The growing popularity of Corning Gorilla® glass as a protective covering for handheld electronic devices was much better than we expected, and our equity investments contributed strong earnings this past year.
“With our solid 2009 performance, we exceeded our $5 billion sales target, achieved very strong free cash flow results, and maintained a strong balance sheet. We improved our competitive position with the introduction of several new products, such as our industry-leading Gen 10 LCD glass, ClearCurve® multimode fiber and LANscape® Pretium® EDGE solution for improved data center performance, advanced DuraTrap® AC product for heavy-duty diesel filters, and new IT applications for Corning Gorilla glass. I believe Corning is a financially stronger and better positioned company now than a year ago.”
Fourth quarter sales in the Display Technologies segment were $717 million, increasing 6% sequentially and 84% vs. the prior year’s quarter. The sequential increase was driven by continued robust retail demand for LCD products and panel makers’ outlook for 2010. The year-over-year gain also reflects these factors but was amplified in comparison to a weak fourth quarter in 2008, when the supply chain was shrinking inventories. Sales also benefited from favorable foreign exchange rates. Sequential glass prices for the quarter were flat and volume increased moderately.
Telecommunications segment sales were $405 million, down 10% sequentially and similar to the fourth quarter of 2008. An expected slowdown in fiber-to-the-home sales and normal seasonal declines in North America contributed to the lower quarterly sales. This was partially offset by continued strong demand for private network products in North America and optical fiber sales in China.
Environmental Technologies segment sales were $181 million, an increase of 8% sequentially and 41% vs. last year. The increase was driven by strong demand for automotive emissions control products, as the industry rebuilds its inventory. Diesel sales improved slightly in Corning’s light-duty diesel business.
Specialty Materials segment sales were $110 million, an increase of 22% sequentially and 31% from a year ago. The increase is reflected by improvements in the segment’s advanced optics product sales and continued expansion of Corning Gorilla glass sales.
“Our economic assumptions for 2010 include a mild recovery in the developed world economies and continued growth in China,” said James B. Flaws, vice chairman and chief financial officer. “Clearly, we don’t have a crystal ball that can guarantee this outlook will come true, so we will be cautious on spending and prepared to be nimble if we see changes. We expect the overall display glass market to be up in the first quarter vs. our original expectation of lower seasonal demand. And, we believe the supply chain will need to continue to expand to support another year of good retail growth for LCD products.”
The company’s wholly owned business is expected to see a quarterly volume increase of 8 to 12% sequentially, while SCP sequential volume should be flat to up slightly in the first quarter. Corning expects moderate price declines in the quarter at its wholly owned business and SCP.
The company anticipates its first quarter 2010 Telecommunications business segment sequential sales to be down 10 to 15% due to lower private network and fiber demand in China. Environmental Technologies segment sequential sales are expected to remain strong, at least through the first half of the quarter, but may decline for the full quarter as the rebuild of auto inventories nears completion. Specialty Materials segment sales are anticipated to be down 10 to 15% sequentially due to lower advanced optics sales. Corning Gorilla glass sales are expected to be up in quarter one.
Additional details, including an archived conference call discussing these results, are available at www.corning.com.