10-KPeriod: FY2010

CORNING INC /NY Annual Report, Year Ended Dec 31, 2010

Filed February 10, 2011For Securities:GLW

Summary

Corning Inc. (GLW) reported a strong recovery in its 2010 fiscal year, with net sales increasing by 23% to $6.63 billion, driven by robust demand across all segments, particularly in Display Technologies and Specialty Materials. The company demonstrated significant financial health, with operating cash flow of $3.8 billion and ending the year with over $6.3 billion in cash and short-term investments. Profitability improved substantially, with net income rising to $3.6 billion, benefiting from strong performance in its equity affiliates, particularly Samsung Corning Precision and Dow Corning, as well as a significant tax benefit related to foreign tax credits. Corning continued to invest strategically in its future, with capital expenditures of $1.0 billion, focusing on expanding capacity for LCD glass substrates in China and increasing production for Corning Gorilla glass. The company also highlighted its commitment to innovation, with increased R&D spending to support its core businesses and emerging opportunities. Looking ahead to 2011, Corning projected significant sales growth, especially in its Specialty Materials segment due to strong demand for Gorilla glass, and an increase in the overall LCD glass market. Despite expected headwinds from higher taxes and potential fluctuations in equity affiliate dividends, Corning remains confident in its strategy of growth through innovation and financial stability.

Financial Highlights

54 data points
Beta

Revenue

$6.63B

46.0% Gross Margin

Net Income

$3.56B

53.6% Net Margin

EPS (Diluted)

$2.25

Total Assets

$25.83B

Cash & Equivalents

$4.60B

Free Cash Flow

$3.83B

Financial Statements
Beta
Revenue$6.63B
Cost of Revenue$3.58B
Gross Profit$3.05B
R&D Expenses$491.00M
SG&A Expenses$1.01B
Operating Income$1.80B
Net Income$3.56B
EPS (Basic)$2.28
EPS (Diluted)$2.25
Shares Outstanding (Basic)1.56B
Shares Outstanding (Diluted)1.58B

Key Highlights

  • 1Net sales increased 23% year-over-year to $6.63 billion in 2010, driven by broad-based segment growth.
  • 2Display Technologies segment saw a 24% increase in net sales, fueled by strong demand for LCD glass, especially for televisions.
  • 3Specialty Materials segment experienced significant growth with a 75% sales increase, largely due to high demand for Corning Gorilla glass.
  • 4Corning's financial position remained strong, with operating cash flow of $3.8 billion and cash reserves exceeding $6.3 billion at year-end.
  • 5Net income attributable to Corning Incorporated more than doubled to $3.56 billion from $2.01 billion in the prior year.
  • 6Significant investments were made in future growth, including a new LCD glass substrate facility in China and capacity expansion for Gorilla glass.
  • 7The company anticipates substantial sales growth in 2011, primarily driven by the Specialty Materials segment.

Frequently Asked Questions

Corning's primary revenue drivers in 2010 were its Display Technologies segment, benefiting from strong demand for LCD glass, and its Specialty Materials segment, driven by the growing popularity of Corning Gorilla glass. The Telecommunications, Environmental Technologies, and Life Sciences segments also contributed positively to overall sales growth.

Corning's equity investments performed strongly in 2010. Equity in earnings of affiliated companies increased by 36% to $1.96 billion. This was primarily driven by improved performance at Samsung Corning Precision Materials (Display Technologies) and Dow Corning (silicone products and polycrystalline silicon), which benefited from increased volumes and favorable market conditions.

Corning expects significant sales growth in 2011, projecting the overall LCD glass market to increase. The Specialty Materials segment, particularly sales of Corning Gorilla glass, is anticipated to be a major growth driver. The Telecommunications segment is also expected to see improved sales due to increased demand for fiber-to-the-premises and enterprise network products.

Corning faces several risks, including significant customer concentration in key segments (e.g., Display Technologies), pricing pressures due to intense competition, risks related to international operations and currency fluctuations (especially the Japanese yen), and potential impacts from global economic volatility. The company also highlighted risks associated with manufacturing capacity adjustments, raw material availability, and ongoing legal proceedings, particularly asbestos litigation.