01—Abstract
Summary
Summary of the 10-K filed February 14, 2022. Cited figures are marked; the original filing is the authoritative source.
Corning Incorporated (GLW) reported strong performance in its 2021 fiscal year, driven by robust demand across its key segments.
The company saw a significant increase in net sales, reaching $14.1 billiona, a 25% rise compared to 2020. This growth was fueled by strong performance in Optical Communications, Life Sciences, and Environmental Technologies, with Display Technologies also showing positive momentum. The company's strategic focus on core technologies and market-access platforms continues to yield results, contributing to increased profitability and robust free cash flow generation.
Corning's outlook for 2022 is positive, with projected net sales of approximately $15 billionb, indicating continued growth. The company remains committed to rewarding shareholders through increased dividends and share repurchases while investing in innovation to maintain its leadership positions. Key risks highlighted in the filing include the ongoing impact of the COVID-19 pandemic, inflationary pressures on raw materials and logistics, supply chain disruptions, and customer concentration in certain segments.
Corning also emphasizes its reliance on intellectual property and the need for continued innovation to maintain its competitive advantage. Despite these challenges, the company's diversified portfolio and strong financial position provide resilience.
02—Key points
Key Highlights
- Net sales increased by 25% to $14.1 billion in 2021, driven by strong performance across all segments.
- Optical Communications segment sales grew 22%, primarily due to demand for 5G, broadband, and cloud computing.
- Life Sciences segment sales increased by 24%, boosted by pandemic-related demand and recovery in research labs.
- Specialty Materials saw a 7% increase in sales, driven by demand for premium cover materials and semiconductor optics.
- Net income attributable to Corning Incorporated significantly increased to $1.9 billion ($1.28 per diluted share) in 2021, a substantial rise from $512 million ($0.54 per diluted share) in 2020.
- Corning expects full-year net sales of approximately $15 billion in 2022, indicating continued growth.
- The company announced a 13% increase in its quarterly common stock dividend for 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Corning kept $0.14.
- Revenue$14.08B100.0%
- Cost of revenue−$9.02B64.0%
- Gross profit$5.06B36.0%
- Operating costs−$2.95B21.0%
- Operating income$2.11B15.0%
- Interest, other & tax−$177.0M1.3%
- Net income$1.94B13.7%
Where FY2021 revenue went
$14.08B- Cost of revenue: $9.02B, 64% of revenue
- Net income: $1.94B, 14% of revenue
- SG&A: $1.83B, 13% of revenue
- R&D: $800.0M, 5.7% of revenue
- Other operating costs: $324.0M, 2.3% of revenue
- Interest, other & tax: $177.0M, 1.3% of revenue
Kept 14% as net incomeInterest, other & tax $177.0M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 14, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $14.08B$11.30B | +24.6% |
| Cost of Revenue | $9.02B$7.77B | +16.0% |
| Gross Profit | $5.06B$3.53B | +43.4% |
| R&D Expenses | $800.00M$1.00B | −20.0% |
| SG&A Expenses | $1.83B$1.75B | +4.6% |
| Operating Income | $2.11B$509.00M | +314.9% |
| Net Income | $1.94B$512.00M | +277.9% |
| EPS (Basic) | $1.30$0.54 | +140.7% |
| EPS (Diluted) | $1.28$0.54 | +137.0% |
| Shares Outstanding (Basic) | 828.00M761.00M | +8.8% |
| Shares Outstanding (Diluted) | 844.00M772.00M | +9.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of Corning's revenue growth in 2021?
Corning's revenue growth in 2021 was driven by strong demand across its segments. The Optical Communications segment benefited from 5G deployment and cloud computing growth. The Life Sciences segment saw increased demand related to the pandemic and a recovery in research activities. Display Technologies experienced growth due to increased volumes and stable pricing, while Specialty Materials was bolstered by demand for cover materials and semiconductor applications. The 'All Other' segment saw significant growth primarily due to the full-year consolidation of Hemlock Semiconductor Group (HSG).
What is Corning's outlook for 2022?
Corning anticipates continued growth in 2022, projecting full-year net sales of approximately $15 billion. The company expects to build on its 2021 performance, leveraging its core technologies and market-access platforms.
What are the key risks facing Corning, as identified in the 10-K filing?
Key risks include the ongoing impact of the COVID-19 pandemic on global economy and operations, inflationary price pressures affecting raw materials, utilities, and labor, supply chain disruptions, and the failure to accurately forecast customer demand. The company also notes risks associated with a concentrated customer base, intellectual property enforcement, cybersecurity vulnerabilities, and potential difficulties in earning a return on R&D investments.
How did the company's capital allocation strategy evolve in 2021?
In 2021, Corning focused on its Strategy & Growth Framework, allocating capital towards core technologies and market-access platforms. The company continued to reward shareholders by increasing its quarterly dividend and engaging in share repurchases. A significant event was the repurchase of 35 million common shares for approximately $1.5 billion, following the conversion of preferred stock.
06—Continue