10-QPeriod: Q1 FY2021

CORNING INC /NY Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 30, 2021For Securities:GLW

Summary

Corning Inc. (GLW) reported a significant rebound in its first quarter of 2021, with net sales soaring 38% year-over-year to $3.3 billion. This growth was broad-based across all segments, including Display Technologies, Optical Communications, Specialty Materials, Environmental Technologies, and Life Sciences, with the 'All Other' segment also boosted by the consolidation of HSG. The company swung from a net loss of $96 million in Q1 2020 to a net income of $599 million in Q1 2021, driven by higher sales, improved gross margins, and the absence of significant restructuring charges seen in the prior year. The strong performance indicates a robust recovery and effective operational management, positioning Corning favorably as economic conditions improve. The company also provided a positive outlook for the second quarter, expecting core net sales between $3.3 and $3.5 billion.

Financial Highlights

49 data points
Beta

Revenue

$3.29B

35.1% Gross Margin

Net Income

$601.00M

18.3% Net Margin

EPS (Diluted)

$0.67

Total Assets

$30.14B

Cash & Equivalents

$2.87B

Free Cash Flow

$723.00M

Financial Statements
Beta
Revenue$3.29B
Cost of Revenue$2.13B
Gross Profit$1.16B
SG&A Expenses$400.00M
Operating Income$502.00M
Net Income$601.00M
EPS (Basic)$0.75
EPS (Diluted)$0.67
Shares Outstanding (Basic)766.00M
Shares Outstanding (Diluted)898.00M

Key Highlights

  • 1Net sales increased by 38% to $3.3 billion in Q1 2021, compared to $2.4 billion in Q1 2020, indicating strong top-line growth across all segments.
  • 2The company returned to profitability, reporting a net income of $599 million in Q1 2021, a significant improvement from a net loss of $96 million in Q1 2020.
  • 3Gross margin more than doubled to $1.16 billion, with gross margin as a percentage of sales increasing from 23% to 35%, driven by higher sales and cost control measures.
  • 4Optical Communications segment net sales grew by 18% to $937 million, fueled by increased demand for data center builds and network capacity expansion.
  • 5The 'All Other' segment saw a substantial 375% increase in net sales to $271 million, primarily due to the consolidation of HSG (Hemlock Semiconductor Group).
  • 6Corning provided a positive outlook for Q2 2021, projecting core net sales between $3.3 billion and $3.5 billion.
  • 7Despite a strong quarter, the company saw a notable increase in Research, Development, and Engineering expenses as a percentage of sales decreasing from 11% to 7%.

Frequently Asked Questions

Corning's net sales increased by 38% to $3.3 billion in the first quarter of 2021, driven by broad-based growth across all its operating segments. Key contributors included strong demand in Optical Communications due to data center growth and network expansion, increased sales in Display Technologies, and the consolidation of Hemlock Semiconductor Group (HSG) into the 'All Other' segment.

Corning experienced a substantial turnaround in profitability. The company reported a net income of $599 million in Q1 2021, compared to a net loss of $96 million in Q1 2020. This improvement was primarily due to higher sales volumes, a significant increase in gross margin (from 23% to 35% of sales), and the absence of substantial restructuring charges that impacted the prior year's results.

Corning anticipates continued growth in the second quarter of 2021. The company projects core net sales to be in the range of $3.3 billion to $3.5 billion.

While the company swung to profitability, it's important to note that Q1 2021 benefited from the absence of restructuring, impairment, and other charges that were present in Q1 2020. Additionally, the Q1 2021 results included a higher translated earnings contract gain compared to the prior year. Investors should also note that Corning utilizes 'core performance measures' which exclude certain items, providing a non-GAAP view of operations. The reconciliation between GAAP and non-GAAP measures is available in the filing.