8-KOther Events

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

Filed July 23, 2002For Securities:GLW

Summary

Corning Incorporated (GLW) reported second-quarter 2002 results with sales of $896 million and a net loss of $370 million, or $0.39 per share. This loss was significantly impacted by $494 million in restructuring and impairment charges, primarily related to workforce reductions and facility closures within the struggling telecommunications segment. Despite the overall loss, the company highlighted that most businesses outside of telecommunications, such as liquid crystal display (LCD) and advanced materials, are experiencing profitable growth and met or exceeded expectations. Corning also announced a gain of $68 million from repurchasing debt and indicated a significant reduction in its cash burn rate due to improved operating cash flow and debt repayments, with $1.3 billion in cash and short-term investments remaining. The company provided a cautious outlook for the third quarter, anticipating sales between $825 million and $875 million, with continued weakness expected in the fiber and cable business due to ongoing depressed demand and price pressures. However, the information display and advanced materials segments are expected to remain strong.

Key Highlights

  • 1Second-quarter sales were $896 million, largely in line with expectations.
  • 2Net loss for the quarter was $370 million ($0.39 per share), heavily influenced by $494 million in restructuring and impairment charges.
  • 3Businesses outside of telecommunications, particularly information display (LCD) and advanced materials, continue to show profitable growth.
  • 4The company reported a $68 million gain from repurchasing debt.
  • 5Corning maintained $1.3 billion in cash and short-term investments, down from the prior quarter due to debt repayments.
  • 6Operating cash flow improved, leading to a reduced cash burn rate.
  • 7The company provided a third-quarter outlook forecasting sales between $825 million and $875 million, with continued challenges in the telecommunications segment.

Frequently Asked Questions

The primary driver of the net loss was $494 million in restructuring and impairment charges. These charges were largely associated with workforce reductions, facility closures, and impairments of investments within Corning's telecommunications segment, which is experiencing significant industry headwinds.

Corning's Information Display segment, driven by strong demand for liquid crystal displays, and its Advanced Materials segment, particularly its Environmental Technologies business, are performing well and showing profitable growth. These segments are offsetting the weakness in the telecommunications sector.

Corning's cash and short-term investments decreased to $1.3 billion from $1.8 billion in the prior quarter, primarily due to approximately $480 million in debt and commercial paper repayments. The company stated that it is pleased with the significant improvement in operating cash flow and that its efforts to control its cash burn rate are showing positive results.

Corning anticipates third-quarter sales to be in the range of $825 million to $875 million. The company expects continued weakness in the fiber and cable business due to flat to declining volumes and price pressures. However, the advanced materials and information display segments are expected to remain strong.