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Corning Reports Strong First Quarter Earnings (posted 5/2/08)

May 2, 2008
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Corning Inc. recently announced results for the first quarter of 2008. Sales reached $1.62 billion, up 24% from last year, while earnings per share were $0.64, including a $327 million gain related to the pending Pittsburgh Corning Corp. bankruptcy proceeding. Excluding the special item for the first quarter, earnings per share were $0.44, better than the company’s guidance of $0.41 to $0.43, and up 57% from last year.

Display Technologies’ glass volume increased 2% sequentially and 50% year over year. Samsung Corning Precision Glass Co. Ltd.’s (SCP) volume was flat sequentially and increased 46% over last year. The company’s sales and earnings comparisons benefited from the weakening U.S. dollar, primarily vs. the Japanese yen. Gross margin for the quarter was 52%, an all-time record for the company.

Sales for the second quarter are expected to be in the range of $1.71 billion to $1.75 billion, an increase of more than 20% compared to the second quarter last year. Earnings per share, excluding special items, are anticipated in the range of $0.47 to $0.50. Combined LCD glass volume for Corning’s wholly owned business and SCP is expected to increase 6 to 9% sequentially, with the wholly owned business up 2 to 5% and SCP up 8 to 13%. Telecommunications sales are expected to be up more than 10% sequentially.
 
“This was a tremendously strong quarter for Corning,” said Wendell P. Weeks, chairman and chief executive officer. “Display glass demand remains robust and we continue to operate our LCD glass substrate facilities at full capacity. The global consumer appetite for LCD televisions continues to grow.” Weeks also noted that a very strong manufacturing performance in Corning’s Display Technologies segment also contributed to the first-quarter results.

“Given the strength of LCD TV in the first quarter and our outlook for the remainder of the year, we now expect the global LCD glass market to grow at the upper end of the 25 to 30% range that we provided earlier this year,” said Weeks.

First quarter 2008 sales for Corning’s Display Technologies segment were $829 million, a 7% sequential increase and a 58% increase over the first quarter of 2007. The display segment results were positively impacted by a favorable U.S.-dollar-to-Japanese-yen exchange rate in the quarter. Price declines were consistent with previous quarters.

Telecommunications segment sales in the first quarter of 2008 were $421 million, a 2% sequential decline and a 4% decline from quarter one 2007. Strong optical fiber volume and higher fiber-to-the-premises sales were offset primarily by the slow start of several customer projects. Corning anticipates that some of these projects will begin in the second quarter. Excluding the impact of last year’s divestiture of Corning’s submarine cabling business, first quarter sales increased 3% vs. last year.

Environmental Technologies segment sales in the first quarter were $197 million, a 4% sequential increase and a nearly 10% increase over the first quarter of 2007. Specialty Materials segment sales were $83 million, about even with first quarter 2007 results. The Life Sciences segment had sales of $81 million, a 10% sequential increase and a 7% increase from last year.

Corning’s equity earnings from Dow Corning were $80 million in the first quarter, compared to $84 million in the previous quarter and $92 million a year ago. Dow Corning’s results were impacted by higher raw material prices.

A replay of a recent conference call discussing these results is available through 5 p.m. EDT, May 13. To listen, call (203) 369-3844. No pass code is required. An audio webcast of the call is also archived on the Investor Relations page at www.corning.com.


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