01—Abstract
Summary
Summary of the 10-K filed February 13, 2023. Cited figures are marked; the original filing is the authoritative source.
Corning Incorporated's (GLW) 2022 Form 10-K highlights a year of resilience amidst a challenging economic environment, marked by inflationary pressures and supply chain disruptions.
Net sales saw a modest 1% increase to $14.2 billiona, driven by robust growth in the Optical Communications segment (+15%) and the Hemlock and Emerging Growth Businesses segment (+34%). However, this growth was tempered by a significant 11% decline in Display Technologies revenue and a negative impact from foreign exchange rates. Net income attributable to Corning Incorporated decreased by 31% to $1.3 billion, largely due to increased charges related to severance, accelerated depreciation, asset write-offs, and legal matters, alongside adverse foreign currency translation impacts.
The company is actively managing cost pressures by implementing price increases and optimizing productivity. Despite headwinds, Corning remains confident in its long-term strategy, focusing on capturing market opportunities and driving innovation across its diverse portfolio, expecting continued multi-year growth with improved margins and cash generation.
02—Key points
Key Highlights
- Net sales increased by 1% to $14.2 billion in 2022, driven by strong performance in Optical Communications and Hemlock/Emerging Growth Businesses, but offset by a decline in Display Technologies and foreign exchange impacts.
- Net income attributable to Corning Incorporated decreased by 31% to $1.3 billion, impacted by increased charges (severance, depreciation, legal) and foreign currency translation losses.
- Optical Communications segment demonstrated significant growth with a 15% increase in net sales to $5.02 billion, fueled by demand for 5G, broadband, and data center solutions.
- Display Technologies segment experienced an 11% decline in net sales to $3.31 billion due to lower panel maker utilization and volume decreases.
- Specialty Materials segment sales remained relatively flat, with growth in advanced optics offsetting softness in consumer electronics markets.
- Environmental Technologies and Life Sciences segments saw flat net sales, with the former impacted by automotive supply constraints and the latter by lower demand for COVID-related products.
- Hemlock and Emerging Growth Businesses, primarily Hemlock Semiconductor Group (HSG), saw a substantial 34% increase in net sales to $1.66 billion, driven by strong demand in semiconductor and solar markets.
- The company is taking actions to improve profitability, including price increases and productivity adjustments, and expects capital expenditures to remain consistent with 2022 levels.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Corning kept $0.09.
- Revenue$14.19B100.0%
- Cost of revenue−$9.68B68.2%
- Gross profit$4.51B31.8%
- Operating costs−$3.07B21.6%
- Operating income$1.44B10.1%
- Interest, other & tax−$122.0M0.9%
- Net income$1.32B9.3%
Where FY2022 revenue went
$14.19B- Cost of revenue: $9.68B, 68% of revenue
- SG&A: $1.90B, 13% of revenue
- Net income: $1.32B, 9.3% of revenue
- R&D: $900.0M, 6.3% of revenue
- Other operating costs: $270.0M, 1.9% of revenue
- Interest, other & tax: $122.0M, 0.9% of revenue
Kept 9.3% as net incomeInterest, other & tax $122.0M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 13, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $14.19B$14.08B | +0.8% |
| Cost of Revenue | $9.68B$9.02B | +7.4% |
| Gross Profit | $4.51B$5.06B | −11.0% |
| R&D Expenses | $900.00M$800.00M | +12.5% |
| SG&A Expenses | $1.90B$1.83B | +3.9% |
| Operating Income | $1.44B$2.11B | −31.9% |
| Net Income | $1.32B$1.94B | −32.0% |
| EPS (Basic) | $1.56$1.30 | +20.0% |
| EPS (Diluted) | $1.54$1.28 | +20.3% |
| Shares Outstanding (Basic) | 843.00M828.00M | +1.8% |
| Shares Outstanding (Diluted) | 857.00M844.00M | +1.5% |
05—Questions
Frequently Asked Questions
What was the main driver of revenue growth in 2022?
The primary driver of revenue growth in 2022 was the Optical Communications segment, which saw a 15% increase in net sales, driven by higher volumes for 5G, broadband, and data center solutions. The Hemlock and Emerging Growth Businesses segment also contributed significantly with a 34% increase in net sales, due to strong demand for semiconductor and solar-grade polysilicon.
What factors led to the decrease in net income?
Net income attributable to Corning Incorporated decreased by 31% primarily due to increased charges including severance, accelerated depreciation, asset write-offs, and other related charges ($238 million increase). Additionally, litigation, regulatory and other legal matters contributed $50 million more, and adverse foreign currency translation impacts affected net income by $120 million.
How is Corning addressing inflationary pressures and operational costs?
Corning is addressing inflationary pressures by taking actions such as raising prices across its businesses to share costs with customers, adjusting productivity ratios closer to historical metrics, and normalizing inventory levels. The company believes these measures will help improve profitability and cash generation.
Which segments are facing challenges, and why?
The Display Technologies segment faced challenges, with an 11% decrease in net sales, attributed to lower volumes primarily from decreased panel maker utilization. The Environmental Technologies and Life Sciences segments reported flat net sales; Environmental Technologies was affected by automotive production constraints due to semiconductor shortages and COVID-related shutdowns in China, while Life Sciences saw lower demand for COVID-related products.
06—Continue