01—Abstract
Summary
Summary of the 10-K filed February 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Corning Incorporated's (GLW) 2023 Form 10-K reveals a challenging year marked by an 11%a decline in net sales, largely due to inventory drawdowns in the Optical Communications segment and softness in the Life Sciences and Specialty Materials sectors.
Despite these headwinds, the company has taken steps to improve profitability through price increases and productivity enhancements. The Display Technologies segment showed resilience with a 7%b sales increase driven by higher volumes and pricing actions. Looking ahead, Corning anticipates normalized market conditions in the midterm and is positioned to capitalize on growth drivers like 5G, cloud computing, AI, larger display sizes, and stricter emission regulations.
The company remains committed to innovation and maintaining its market leadership across its diverse segments. Investors should monitor the company's progress in restoring demand and profitability, particularly in its key Optical Communications and Display Technologies segments, as well as its disciplined approach to capital allocation and ongoing strategic investments.
02—Key points
Key Highlights
- Net sales decreased by 11% year-over-year to $12.588 billion, primarily impacted by a 20% decline in the Optical Communications segment.
- Display Technologies segment saw a 7% increase in net sales to $3.532 billion, driven by higher volumes and price increases.
- Specialty Materials segment experienced a 7% decrease in net sales to $1.865 billion, mainly due to lower demand in the smartphone, tablet, and notebook markets.
- Environmental Technologies segment reported an 11% increase in net sales to $1.766 billion, supported by strong automotive demand and gasoline particulate filter adoption in China.
- Life Sciences segment faced a 22% decline in net sales to $959 million, attributed to reduced demand for COVID-related products and inventory drawdowns by customers.
- The company ended the year with $1.779 billion in cash and cash equivalents, indicating a strong liquidity position.
- Corning maintained its commitment to shareholders by returning capital through dividends, with total dividends paid of $989 million in 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Corning kept $0.05.
- Revenue$12.59B100.0%
- Cost of revenue−$8.66B68.8%
- Gross profit$3.93B31.2%
- Operating costs−$3.04B24.2%
- Operating income$890.0M7.1%
- Interest, other & tax−$309.0M2.5%
- Net income$581.0M4.6%
Where FY2023 revenue went
$12.59B- Cost of revenue: $8.66B, 69% of revenue
- SG&A: $1.84B, 15% of revenue
- Net income: $581.0M, 4.6% of revenue
- R&D: $900.0M, 7.1% of revenue
- Other operating costs: $298.0M, 2.4% of revenue
- Interest, other & tax: $309.0M, 2.5% of revenue
Kept 4.6% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 12, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $12.59B$14.19B | −11.3% |
| Cost of Revenue | $8.66B$9.68B | −10.6% |
| Gross Profit | $3.93B$4.51B | −12.8% |
| R&D Expenses | $900.00M$900.00M | 0.0% |
| SG&A Expenses | $1.84B$1.90B | −2.9% |
| Operating Income | $890.00M$1.44B | −38.1% |
| Net Income | $581.00M$1.32B | −55.9% |
| EPS (Basic) | $0.69$1.56 | −55.8% |
| EPS (Diluted) | $0.68$1.54 | −55.8% |
| Shares Outstanding (Basic) | 848.00M843.00M | +0.6% |
| Shares Outstanding (Diluted) | 859.00M857.00M | +0.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of Corning's sales decline in 2023?
The primary driver of the 11% decline in net sales was a significant drop in the Optical Communications segment, down 20%, attributed to carriers reducing inventory levels. Additionally, the Life Sciences segment saw a 22% decrease due to lower demand for COVID-related products and customer inventory drawdowns, while the Specialty Materials segment experienced a 7% dip from reduced demand in mobile consumer electronics.
How did the Display Technologies segment perform, and what are the outlook drivers?
The Display Technologies segment demonstrated resilience with a 7% increase in net sales. This growth was fueled by higher panel maker utilization and price increases implemented in the second half of the year. Corning anticipates continued demand driven by the trend towards larger screen sizes in televisions and other display devices.
What is Corning's financial health and liquidity position?
Corning maintains a strong financial position, ending 2023 with $1.779 billion in cash and cash equivalents. The company also has substantial available credit capacity. Its liquidity is considered sufficient to fund operations, meet obligations, and support strategic initiatives like capital expenditures, debt repayments, dividends, and share repurchases.
What are the key risks identified in the filing for Corning's business?
Key risks highlighted include inflationary price pressures and uncertain availability of raw materials, supply chain disruptions, manufacturing interruptions, dependence on a concentrated customer base, potential cybersecurity threats, the risk of not earning a return on R&D investments, and the impact of global economic and geopolitical uncertainties. Additionally, the company notes risks associated with foreign currency fluctuations and its significant exposure to the Display Technologies segment's profitability.
06—Continue