Summary
Corning Incorporated (GLW) reported its first-quarter 2003 results, exceeding previous guidance and showing sequential sales growth for the first time in two years. Total sales reached $746 million, though the company posted a net loss of $205 million ($0.17 per share). This loss was significantly impacted by $201 million in after-tax charges, primarily related to an asbestos litigation settlement and restructuring/impairment costs associated with business segment adjustments. Management highlighted strong demand in the LCD market and improved performance in fiber and cable, particularly in Japan and China, as key drivers. The company remains focused on returning to profitability by the third quarter of 2003, citing improved gross margins and reduced operating costs from ongoing restructuring efforts. Despite the net loss, the company demonstrated positive operating cash flow for the quarter, bolstered by a significant federal income tax refund. Corning ended the quarter with $1.85 billion in cash and short-term investments and successfully reduced its debt-to-capital ratio. Looking ahead, Corning anticipates second-quarter sales to range between $715 million and $745 million, with a near break-even earnings per share expectation, excluding certain charges. The outlook for the LCD glass business remains strong, while fiber volumes are expected to decline seasonally. Management is also actively exploring strategic options for its Photonic Technologies business.
Key Highlights
- 1First-quarter 2003 sales of $746 million exceeded guidance and increased sequentially from the prior quarter ($736 million).
- 2Reported a net loss of $205 million ($0.17 per share), which includes $201 million ($0.17 per share) in after-tax charges for asbestos litigation settlement and restructuring/impairment.
- 3Strong sequential sales growth in the Telecommunications segment was driven by increased fiber volume in Japan and China, though North America and Europe remained soft.
- 4The Technologies segment, particularly Display Technologies (LCD glass) and Environmental Technologies, showed strong performance, benefiting from increased demand and favorable exchange rates.
- 5Corning ended Q1 2003 with $1.85 billion in cash and short-term investments and reduced its debt-to-capital ratio to 45.6% from 46.7%.
- 6The company expects to return to profitability by the third quarter of 2003, driven by strong display business performance and cost-cutting measures.
- 7Second-quarter 2003 sales are projected between $715 million and $745 million, with earnings per share expected between a loss of $0.02 and income of $0.01 (excluding specific charges).