10-QPeriod: Q1 FY2023

CORNING INC /NY Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 28, 2023For Securities:GLW

Summary

Corning Incorporated (GLW) reported a significant year-over-year decrease in net sales and net income for the first quarter of 2023 compared to the same period in 2022. Net sales declined by 14% to $3.178 billion, primarily due to weaker performance in the Display Technologies, Specialty Materials, and Optical Communications segments. Net income attributable to Corning Incorporated fell sharply by 70% to $176 million, or $0.20 per diluted share, down from $581 million, or $0.68 per diluted share, in Q1 2022. This decline was exacerbated by a substantial decrease in translated earnings contract gains and foreign currency translation impacts. Despite the revenue and profit declines, Corning highlighted actions taken to improve profitability and cash generation, including price increases, productivity adjustments, and inventory normalization, which began showing results in the first quarter. The company also provided an outlook for the second quarter of 2023, expecting core net sales between $3.4 billion and $3.6 billion. While liquidity remains strong, investors should monitor the performance of key segments and the impact of macroeconomic conditions and currency fluctuations on future results.

Financial Highlights

50 data points
Beta

Revenue

$3.18B

31.6% Gross Margin

Net Income

$176.00M

5.5% Net Margin

EPS (Diluted)

$0.20

Total Assets

$28.82B

Cash & Equivalents

$1.15B

Free Cash Flow

-$49.00M

Financial Statements
Beta
Revenue$3.18B
Cost of Revenue$2.17B
Gross Profit$1.00B
SG&A Expenses$421.00M
Operating Income$297.00M
Net Income$176.00M
EPS (Basic)$0.21
EPS (Diluted)$0.20
Shares Outstanding (Basic)844.00M
Shares Outstanding (Diluted)859.00M

Key Highlights

  • 1Net sales decreased by 14% to $3.178 billion in Q1 2023 compared to $3.680 billion in Q1 2022.
  • 2Net income attributable to Corning Incorporated decreased by 70% to $176 million ($0.20/share) in Q1 2023 from $581 million ($0.68/share) in Q1 2022.
  • 3The Display Technologies segment saw a 20% decrease in net sales, largely due to lower volumes and panel maker utilization.
  • 4Specialty Materials segment sales declined by 18% due to weaker demand in the smartphone, tablet, and notebook markets.
  • 5Optical Communications segment sales decreased by 6%, driven by a slowdown in carrier product sales timing.
  • 6Corning is implementing actions such as price increases and productivity adjustments to improve profitability and cash flow.
  • 7The company provided a positive outlook for Q2 2023 core net sales, projecting between $3.4 billion and $3.6 billion.

Frequently Asked Questions

The significant decrease in net income was primarily driven by a combination of lower sales volumes across several segments, particularly Display Technologies, Specialty Materials, and Optical Communications. Additionally, there was a substantial reduction in translated earnings contract gains and an adverse impact from foreign currency exchange rate movements compared to the prior year.

Corning is implementing several actions to improve profitability and cash generation. These include raising prices to offset inflationary costs, adjusting productivity ratios closer to historical metrics, and normalizing inventory levels. Management expects these actions to positively impact profitability and cash flow throughout 2023.

Most segments experienced a year-over-year decline in net sales. Optical Communications decreased by 6%, Display Technologies by 20%, Specialty Materials by 18%, and Life Sciences by 17%. Environmental Technologies was a bright spot, increasing sales by 5%. The Hemlock and Emerging Growth Businesses segment saw a 3% increase.

Corning anticipates core net sales for the second quarter of 2023 to be in the range of $3.4 billion to $3.6 billion.