8-KOther Events

CORNING INC /NY 8-K Report (Jul 19, 2004)

Filed July 19, 2004For Securities:GLW

Summary

Corning Incorporated (GLW) announced its second-quarter 2004 financial results, reporting a significant sequential increase in both sales and net income. Sales grew 15% quarter-over-quarter to $971 million, driven by strong performance in the Telecommunications and Display Technologies segments. Net income more than doubled sequentially to $108 million, or $0.07 per share, benefiting from higher sales and improved equity earnings from associated companies. The company highlighted robust growth in its Display Technologies segment, with sales up 20% sequentially due to increased volume of liquid crystal display (LCD) glass, and stable pricing. The Telecommunications segment also showed improvement, with sales up 26% sequentially, driven by strong demand for fiber and cable, partly due to Verizon's fiber-to-the-premises build-out. Despite these positive trends, Corning anticipates a sequential decrease in fiber volume for the third quarter due to market seasonality and the impact of an anti-dumping ruling in China.

Key Highlights

  • 1Second-quarter sales reached $971 million, a 15% increase from the prior quarter.
  • 2Net income for the quarter was $108 million, or $0.07 per share, nearly doubling from the previous quarter.
  • 3Display Technologies segment sales increased by 20% sequentially, driven by 22% volume growth in LCD glass.
  • 4Telecommunications segment sales rose 26% sequentially, supported by strong demand for fiber and cable, including Verizon's FTTx deployment.
  • 5Corning ended the quarter with $1.6 billion in cash and short-term investments, up from $1.5 billion in Q1, and reduced its debt-to-capital ratio to 31.2%.
  • 6The company provided third-quarter guidance expecting sales between $950 million and $1 billion, with earnings per share of $0.10 to $0.12 (excluding special items).
  • 7Corning is increasing its full-year capital spending estimate to $950 million - $1 billion to support LCD market growth and construction projects in Taiwan.

Frequently Asked Questions

Corning's sales grew 15% sequentially to $971 million, primarily driven by strong performance in its Telecommunications segment (up 26%) and Display Technologies segment (up 20%). The Telecommunications segment benefited from seasonal increases in fiber and cable volume and strong demand for hardware due to fiber-to-the-premises build-outs. The Display Technologies segment saw increased volume of liquid crystal display (LCD) glass with stable pricing.

Net income significantly improved, nearly doubling from $55 million in the first quarter to $108 million in the second quarter. Earnings per share were $0.07, compared to a lower figure in the prior quarter. This improvement was attributed to higher sales in key segments and strong equity earnings from associated companies like Dow Corning and Samsung Corning Precision Glass.

Corning anticipates third-quarter sales to range between $950 million and $1 billion, with earnings per share projected to be between $0.10 and $0.12, excluding special items. The company expects a sequential decrease in fiber volume in the Telecommunications segment (10-15%) due to seasonality and the impact of China's anti-dumping ruling, but anticipates continued strong hardware sales and another strong quarter for Display Technologies.

Corning reported net after-tax charges of $61 million ($0.04 per share). Key charges included a $45 million after-tax impact related to the increased market value of Corning stock to be contributed for the asbestos litigation settlement, and $21 million in equity earnings related to restructuring actions and interest liability adjustments at Dow Corning Corporation.