Corning Reports Second-Quarter 2018 Financial Results

Corning Incorporated (NYSE: GLW) today announced results for its second-quarter 2018 ended June 30, 2018.
News Summary:

• Solid second-quarter results driven by year-over-year sales growth in each of the company’s businesses
  • GAAP sales of $2.7 billion, up 10% year over year
  • Core sales of $2.8 billion, up 9% year over year
  • GAAP EPS of $0.78 reflected a non-cash mark-to-market gain associated with the company’s currency-hedging contracts
  • Core EPS of $0.38
• On track to expand margins and reach approximately $11.3 billion in full-year 2018 sales, up from prior guidance of approximately $11 billion, and up 10% year over year. Specific contributors to the raised outlook for the full year include:
  • Strong market demand and successful ramping of capacity expansions
  • Optical Communications is now expected to grow by a high-teens percentage for the year versus prior guidance of 10%
  • Environmental Technologies is now expected to grow by a mid-teens percentage for the year versus prior guidance of 10%
  • Display Technologies continues to make advances toward stable returns; glass pricing continues to moderate; and ramp of new Gen 10.5 plant is on schedule
• Continued progress on Strategy and Capital Allocation Framework
  • Returned $829 million to shareholders in second-quarter 2018, for a total of $10.8 billion since the Framework’s introduction
  • Completed the acquisition of 3M’s Communication Markets Division
  • Introduced Corning^® Gorilla^® Glass 6 and other innovative products for Mobile Consumer Electronics on July 18

“As planned, we undertook a phase of intense operating and capital investment to meet committed demand and capture new opportunities. We have now reached an inflection point in which these investments are yielding clear benefits,” said Wendell P. Weeks, chairman, chief executive officer, and president. “As a result, we are on track to meet increased demand, grow sales, and significantly improve profitability in the third quarter and beyond. We now expect full-year sales to reach approximately $11.3 billion.”
Strategy and Capital Allocation Framework Progress
Corning’s Framework outlines the company’s 2016-2019 leadership priorities. Under the Framework, Corning plans to deliver more than $12.5 billion to shareholders while investing $10 billion in growth opportunities. Since it was announced in October 2015, the company has returned $10.8 billion to shareholders, including $829 million in the second quarter.
“We continue to make excellent progress on our Framework objectives, keeping us on track to fully achieve our Strategy and Capital Allocation Framework goals,” added Weeks.
Highlights of the company’s progress:

• Completed the acquisition of 3M’s Communication Markets Division
  • Extends the company’s market reach and access to global customers
  • Expands Corning’s Optical Communications product portfolio
  • Provides additional strength to the segment’s already robust sales momentum
• Continued to add value to mobile consumer electronic devices with the launch of Corning Gorilla Glass 6 alongside related innovations; Gorilla Glass has been designed into more than 6 billion devices
• Sustained market leadership in gasoline particulate filters and advanced automotive innovation
  • Reached global production milestone of 1 million gasoline particulate filters and expanded investment in Hefei, China, as automakers prepare for upcoming regulations
  • Announced a finishing capacity investment for Corning Gorilla Glass for Automotive Interiors in Hefei, China
• Continued collaboration with Merck and Pfizer on Corning Valor Glass
  • Announced a high-volume manufacturing facility in Durham, North Carolina
  • Presented with Pfizer at the DCAT Sharp Sourcing conference
• Continued ramping production of the world’s first Gen 10.5 glass at new Hefei facility on schedule and in tandem with BOE’s panel production.

Corning is investing across its market-access platforms to capture short- and long-term sales growth opportunities:

• Reaching $5 billion in sales by 2020 in Optical Communications
• Doubling sales over the next several years in Mobile Consumer Electronics
• Maintaining stable returns and winning new categories in Display
• Building a $500 million GPF business and creating a new glass business in Automotive
• Growing the base and creating a significant pharmaceutical packaging business in Life Sciences Vessels