8-KOther Events

CORNING INC /NY 8-K Report (Jan 23, 2002)

Filed January 23, 2002For Securities:GLW

Summary

Corning Incorporated (GLW) reported a significant pro forma net loss of $261 million, or $0.28 per share, for the fourth quarter of 2001. This marks a substantial decline from the $307 million ($0.33 per share) pro forma earnings in the same quarter of 2000. The reported results were heavily impacted by pre-tax operating charges totaling $178 million ($109 million after-tax) related to restructuring initiatives. The company attributed the sharp downturn primarily to a severe contraction in its Telecommunications segment, where sales plummeted by 65% year-over-year due to extremely weak demand for optical fiber and cable. This led to significant operational slowdowns and the idling of manufacturing facilities. Weak global economic conditions also negatively affected the Advanced Materials and Information Display segments. For the full year 2001, Corning reported a pro forma net loss per share of $0.17, a significant decrease from $1.22 in 2000, with total sales down 12% to $6.3 billion.

Key Highlights

  • 1Corning reported a Q4 2001 pro forma net loss of $261 million ($0.28/share), a significant decline from Q4 2000 pro forma earnings of $307 million ($0.33/share).
  • 2Full-year 2001 pro forma earnings per share were $0.17, down from $1.22 in 2000, with total sales decreasing 12% to $6.3 billion.
  • 3The Telecommunications segment was severely impacted, with Q4 2001 sales down 65% year-over-year due to weak demand for optical fiber and cable.
  • 4The company recorded $178 million in pre-tax operating charges in Q4 2001, primarily related to restructuring actions.
  • 5Corning announced significant restructuring actions in the second half of 2001, including the elimination of 12,000 positions and the closure of manufacturing operations, expecting annualized savings of approximately $400 million.
  • 6The company ended 2001 with $2.2 billion in cash and maintained significant liquidity with $2 billion in committed credit lines.

Frequently Asked Questions

The primary driver was a severe downturn in the Telecommunications segment, with sales dropping 65% due to extremely weak demand for optical fiber and cable. This was compounded by broader weak global economic conditions affecting other segments. The company also recorded substantial restructuring charges.

Corning undertook significant restructuring, including eliminating 12,000 positions, closing manufacturing operations, and reducing capacity to meet expected revenue levels. These actions are expected to yield annualized savings of approximately $400 million.

Corning indicated that while the telecommunications business continues to experience weakness, there are signs of market stabilization. They did not provide specific guidance for 2002 but planned to discuss first-quarter expectations at an investor meeting on February 8, 2002. They expressed optimism about emerging technologies in their Advanced Materials segment and growth potential in their liquid crystal display business.

Corning's sales for the fourth quarter of 2001 were $974 million, which is less than half of the $2.1 billion reported in the fourth quarter of 2000. This significant decline was led by the Telecommunications segment.