8-KOther Events

CORNING INC /NY 8-K Report (Oct 9, 2002)

Filed October 9, 2002For Securities:GLW

Summary

Corning Incorporated (GLW) filed an 8-K on October 9, 2002, to announce that its third-quarter 2002 results were expected to be within previously issued guidance. The company projected sales between $830 million and $840 million, with a net loss expected to be in the range of $0.07 to $0.08 per share, excluding one-time items. Including previously announced restructuring and impairment charges of approximately $125 million pretax, along with a $0.12 per share impact from mandatory convertible preferred stock dividends, the total expected net loss for the quarter was projected to be between $0.27 and $0.28 per share. Despite meeting guidance, Corning acknowledged continued weakness in its telecommunications business, attributing it to reduced carrier capital expenditures, industry consolidation, and bankruptcies. This weakness led to sales at the lower end of the guidance range. The company indicated that further restructuring actions, including potential headcount reductions and asset disposals within the telecommunications segment, would be necessary in the fourth quarter to align costs with market realities and achieve profitability in 2003. Corning also highlighted its strong liquidity position, with over $1.5 billion in cash and short-term investments at the end of the quarter.

Key Highlights

  • 1Corning expects Q3 2002 results to meet previously issued guidance.
  • 2Projected Q3 sales range: $830 million to $840 million.
  • 3Anticipates a net loss of $0.07 to $0.08 per share (excluding one-time items) for Q3.
  • 4Total expected net loss for Q3, including charges and preferred stock dividends, is $0.27 to $0.28 per share.
  • 5Acknowledges continued weakness and lower-end sales performance in the telecommunications segment due to industry challenges.
  • 6Plans further restructuring in Q4, including potential headcount reductions and asset optimization in the telecom business.
  • 7Maintains a strong liquidity position with over $1.5 billion in cash and short-term investments.

Frequently Asked Questions

The expected net loss in Q3 2002 is primarily due to previously announced restructuring and impairment charges of approximately $125 million pretax, as well as a $0.12 reduction in earnings per share related to dividends on its Series C mandatory convertible preferred stock. Underlying operational performance in the telecommunications segment also contributed to the loss.

Corning is facing significant challenges in its telecommunications business, including reduced capital expenditures by carriers, a lack of industry consolidation, and bankruptcies. These factors are driving further weakness and necessitating additional restructuring efforts.

Corning plans to detail its third-quarter results, the next phase of its restructuring actions, and its liquidity position in a news release and investor conference call scheduled for October 30, 2002, at 8:30 a.m. EST.

Corning remains comfortable with its liquidity position and ended the third quarter with over $1.5 billion in cash and short-term investments.