8-KEarnings & ResultsRegulation FDExhibits & Filings

CORNING INC /NY 8-K Report, Financial Results (Jan 24, 2006)

Filed January 24, 2006For Securities:GLW

Summary

Corning Incorporated (GLW) announced its fourth-quarter and full-year 2005 financial results on January 24, 2006. The company reported fourth-quarter sales of $1.2 billion and a net loss of $32 million ($0.02 per share). This net loss included significant special charges of $371 million, primarily related to a $443 million tax expense charge for increasing the valuation allowance against U.S. deferred tax assets. Excluding these special items, Corning's fourth-quarter net income was $339 million, or $0.22 per share. For the full year 2005, Corning achieved sales of $4.58 billion, a 19% increase year-over-year, driven by strong performance in its Display Technologies segment. The company reported a net income of $585 million ($0.38 per share) for the full year, which also included significant special charges. Excluding these charges, full-year net income was $1.3 billion ($0.85 per share), a substantial improvement from 2004. The company also highlighted strong cash flow generation and a strengthened balance sheet, ending the year with more cash than debt for the first time in over 25 years.

Key Highlights

  • 1Corning reported fourth-quarter sales of $1.2 billion, an increase of 16% year-over-year.
  • 2Full-year 2005 sales reached $4.58 billion, up 19% from 2004, primarily driven by the Display Technologies segment.
  • 3Fourth-quarter net loss was $32 million ($0.02 per share), but excluding $371 million in special charges, net income was $339 million ($0.22 per share).
  • 4Full-year 2005 net income was $585 million ($0.38 per share), or $1.3 billion ($0.85 per share) excluding special items, representing significant profit growth.
  • 5The company ended 2005 with $2.4 billion in cash and cash equivalents and achieved free cash flow of $443 million for the full year.
  • 6Corning's debt-to-capital ratio improved significantly to 24% from 41% in the prior year.
  • 7First-quarter 2006 guidance projects sales between $1.2 billion and $1.25 billion, with EPS expected between $0.21 and $0.23 (excluding special items).

Frequently Asked Questions

The net loss of $32 million was primarily due to $371 million in net special charges. The largest component of these charges was a $443 million tax expense to increase the valuation allowance against Corning's U.S. deferred tax assets.

The Display Technologies segment showed strong growth, with fourth-quarter sales increasing by 67% year-over-year to $518 million. This growth was driven by a significant increase in liquid crystal display (LCD) glass volume, particularly for LCD televisions.

Corning anticipates first-quarter 2006 sales to be in the range of $1.2 billion to $1.25 billion, with earnings per share projected between $0.21 and $0.23, excluding special items. The company expects comparable gross margins to the fourth quarter of 2005, but anticipates more significant price reductions in LCD glass compared to recent quarters.

Yes, the company reported a significantly strengthened balance sheet. They ended 2005 with $2.4 billion in cash and cash equivalents and $1.8 billion in debt, resulting in a debt-to-capital ratio of 24%. This marks the first time in over 25 years that Corning ended the year with more cash on hand than debt.