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Corning Announces Fourth-Quarter and Full-Year Financial Performance

Corning Announces Fourth-Quarter and Full-Year Financial Performance

  • Categories:Trade Trends
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  • Time of issue:2017-03-10 16:20
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Corning Announces Fourth-Quarter and Full-Year Financial Performance

  • Categories:Trade Trends
  • Author:
  • Origin:
  • Time of issue:2017-03-10 16:20
  • Views:

 Corning Incorporated 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 tables following this 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 in millions*

$498

$513

(3%)

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 in millions*

$1,940

$2,789

(30%)

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 tables following this 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™ 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.

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