What were the main drivers of the change in net income between Q2 2007 and Q2 2006?

The primary reason for the slight decrease in net income from Q2 2006 to Q2 2007 was a $76 million asbestos settlement expense recorded in Q2 2007, compared to a $61 million credit in Q2 2006. This was partially offset by higher net income in the Display Technologies operating segment and a decrease in equity earnings compared to Q2 2006, which included a $33 million gain from Dow Corning's tax settlement.

How is Corning managing its debt and capital structure?

Corning continues to strengthen its financial position. The debt-to-capital ratio improved to 15% as of June 30, 2007, down from 19% at year-end 2006. The company generated substantial operating cash flow and has had its debt ratings upgraded by major rating agencies. Additionally, the company announced a $500 million share repurchase program and continues to pay a quarterly dividend.

What are the company's key investments and outlook for its major segments?

Corning is investing heavily in manufacturing capacity, particularly for LCD glass substrates in Display Technologies and diesel products in Environmental Technologies, with expected capital expenditures of $1.1 to $1.2 billion for 2007. The Display Technologies segment shows strong volume growth driven by demand for LCD TVs and monitors, despite price declines. The Telecommunications segment experienced a slight sales decline but is seeing growth opportunities. Environmental Technologies is benefiting from new emissions regulations driving demand for diesel products. The company anticipates continued industry growth in LCD glass and strong demand in the diesel market.

What is the status of the Pittsburgh Corning Corporation (PCC) asbestos settlement?

The PCC Plan of Reorganization has not yet been confirmed by the Bankruptcy Court. The court denied confirmation in December 2006, and parties have filed for reconsideration. While Corning has recorded significant charges related to the settlement, its ultimate confirmation and any potential changes to the plan remain uncertain. Management believes the accrued reserve is adequate, but ongoing fluctuations in stock price and potential adjustments to the plan introduce some variability.

GLW 10-Q Quarterly Report Q2 FY2007 — Revenue, Net Income, EPS

Summary

Corning Inc. reported solid financial performance for the second quarter and first half of 2007. Net sales increased by 12% in Q2 and 8% for the first half compared to the prior year, driven primarily by strong volume growth in the Display Technologies and Environmental Technologies segments. Despite a $76 million asbestos settlement charge in Q2 2007 (compared to a credit in Q2 2006), the company's profitability remained robust. Net income for the second quarter was $489 million ($0.30 diluted EPS), a slight decrease from $514 million ($0.32 diluted EPS) in the prior year, but for the first six months, net income increased by 6% to $816 million ($0.51 diluted EPS) from $771 million ($0.50 diluted EPS). The company's balance sheet remains strong, with a declining debt-to-capital ratio to 15% and significant operating cash flow of $668 million for the first half. Corning's strategic focus on financial health, profitability improvement, and future investment continues. Capital expenditures are heavily directed towards expanding manufacturing capacity, particularly for LCD glass substrates and diesel products. The company also announced a $500 million stock repurchase program and declared a quarterly dividend of $0.05 per share.

Key Highlights

1Net sales increased 12% year-over-year in Q2 2007 to $1.418 billion, driven by volume growth in Display Technologies and Environmental Technologies.
2Net income for Q2 2007 was $489 million ($0.30 diluted EPS), down slightly from $514 million ($0.32 diluted EPS) in Q2 2006, primarily due to a $76 million asbestos settlement charge.
3For the first six months of 2007, net income increased 6% to $816 million ($0.51 diluted EPS) compared to $771 million ($0.50 diluted EPS) in the prior year.
4Operating cash flow was strong at $668 million for the first six months of 2007.
5The company's debt-to-capital ratio improved to 15% as of June 30, 2007, down from 19% at December 31, 2006.
6Corning announced a $500 million share repurchase program and declared a quarterly dividend of $0.05 per share.
7Significant capital expenditures are planned, with $1.1 billion to $1.2 billion expected for 2007, largely for Display Technologies and Environmental Technologies capacity expansion.

CORNING INC /NY Quarterly Report for Q2 Ended Jun 30, 2007

Summary

Key Highlights

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