Summary
Corning Incorporated's (GLW) 2017 Form 10-K highlights a year of sales growth driven primarily by its Optical Communications and Specialty Materials segments, which saw increases of 18% and 25% respectively. Despite this top-line expansion, the company reported a net loss of $497 million for the year, significantly impacted by the absence of a large non-taxable gain from a 2016 equity realignment and the provisional tax expense associated with the 2017 Tax Act. The Display Technologies segment experienced a 7% sales decline, largely due to an approximate 10% decrease in LCD glass pricing. Management remains focused on its Strategy and Capital Allocation Framework, aiming to generate substantial cash and invest in core technologies to maintain leadership positions in its diverse markets, which include optical communications, mobile consumer electronics, display technology, automotive, and life sciences. Looking ahead to 2018, Corning anticipates continued core sales growth, projecting approximately $11 billion. The company expects pricing in Display Technologies to stabilize, with year-over-year declines moderating to mid-single digits, while Optical Communications is projected to grow about 10%. The company also continues to return capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value. Key risks include pricing pressures in Display Technologies, customer concentration, and potential disruptions from global economic and political factors.
Financial Highlights
52 data points| Revenue | $10.12B |
| Cost of Revenue | $6.10B |
| Gross Profit | $4.02B |
| R&D Expenses | $689.00M |
| SG&A Expenses | $1.47B |
| Operating Income | $1.61B |
| Net Income | -$497.00M |
| EPS (Basic) | $-0.66 |
| EPS (Diluted) | $-0.66 |
| Shares Outstanding (Basic) | 895.00M |
| Shares Outstanding (Diluted) | 895.00M |
Key Highlights
- 1Net sales increased by 8% to $10.1 billion in 2017, driven by strong performance in Optical Communications (up 18%) and Specialty Materials (up 25%).
- 2Corning reported a net loss of $497 million for 2017, a significant shift from the $3.7 billion net income in 2016, largely due to the 2017 Tax Act's impact and the absence of a prior year's non-taxable gain.
- 3The Display Technologies segment saw a 7% decrease in net sales, primarily due to an approximate 10% decline in LCD glass pricing.
- 4The company announced an agreement to acquire 3M's Communication Markets Division for approximately $900 million, expected to close in 2018, to bolster its Optical Communications segment.
- 5Corning continued to return capital to shareholders, increasing its quarterly common stock dividend by 16.1% in early 2018 and repurchasing shares under a $4 billion program authorized in 2016.
- 6The company expects 2018 core sales to reach approximately $11 billion, with Optical Communications projected to grow about 10% and Display Technologies pricing declines expected to moderate.
- 7Corning continues to invest significantly in R&D (9% of sales) and capital expenditures ($1.8 billion in 2017) to maintain its innovation leadership and expand capacity.