News Release
FOR RELEASE – July 30, 2024
Corning Reports Strong Second-Quarter 2024 Financial Results, Exceeding April Guidance and Marking Return
to Year-over-Year Sales Growth
Outperformance was driven primarily by the
strong adoption of new optical connectivity products for generative AI
Management expects core sales to grow to ~$3.7 billion in the third quarter, with
core EPS growing faster than sales and in the range of $0.50 to $0.54
Corning and Lumen Technologies reach an agreement to reserve 10% of Corning’s global fiber capacity for each of the next two years to interconnect
AI-enabled data centers
Results and outlook reinforce management’s confidence in its ‘Springboard’ plan to add more than $3 billion in annualized sales with strong incremental profit and
cash flow in the next three years, as cyclical factors and secular trends converge
CORNING, N.Y. — Corning Incorporated (NYSE: GLW) today announced its second-quarter 2024 results and provided its outlook for third-quarter 2024.
Wendell P. Weeks, chairman and chief executive officer, said, “Our strong second-quarter results exceeded the guidance we provided in April and marked a return to year-over-year core sales and EPS growth. The outperformance was driven primarily by the strong adoption of our new optical connectivity products for generative AI, which drove record sales in the Enterprise portion of our Optical Communications business. The opportunity is only growing; in fact, in the third quarter, we reached an agreement with Lumen Technologies that uses our new gen-AI fiber and cable system to facilitate Lumen’s build of a new network to interconnect AI-enabled data centers.”
Weeks continued, “We’re off to a great start with our ‘Springboard’ plan. We’ve positioned the company to capture significant growth – with powerful incremental profit and cash flow – as cyclical factors and secular trends converge to drive demand for our capabilities. Because of our growing confidence in Springboard, we began buying back shares in the second quarter. We’re energized by the tremendous opportunity for value creation we’ve built for our shareholders.”
Second-Quarter 2024 Financial Highlights:
- GAAP sales were $3.25 billion. Core sales were $3.60 billion.
- GAAP EPS was $0.12, and core EPS was $0.47. The difference between GAAP and core EPS primarily reflected constant currency adjustments, translated earnings contract gains, and translation gains on Japanese-yen-denominated debt, as well as restructuring and non-cash asset write-off charges.
- GAAP gross margin was 29.2%. Core gross margin improved sequentially and year over year by 110 and 170 basis points, respectively, to 37.9%.
- GAAP operating cash flow was $521 million, and adjusted free cash flow was $353 million.
Third-Quarter 2024 Outlook:
- For the third quarter, management expects core sales to grow to approximately $3.7 billion with core EPS in the range of $0.50 to $0.54. The sequential sales increase is driven primarily by the continued adoption of new optical connectivity products for generative AI in Optical Communications more than offsetting the expected slowdown in the North American Class 8 truck market.
Ed Schlesinger, executive vice president and chief financial officer, said, “Our second-quarter results reflect great progress against our ‘Springboard’ plan. Core gross margin and operating margin improved 110 basis points and 190 basis points, respectively, versus the prior quarter. We also grew adjusted free cash flow to $353 million. These results are a strong proof point of the incremental profit and cash flow we expect to deliver as we capture the more than $3 billion annualized sales growth opportunity we’ve outlined.”
Schlesinger continued, “For the third quarter, we expect core sales to grow to approximately $3.7 billion, with continued adoption of our new optical connectivity products for generative AI. We expect core EPS to grow much faster than sales and to be in the range of $0.50 to $0.54. We’re well on our way to delivering our ‘Springboard’ plan.”
Second-Quarter 2024 Results and Comparisons
(In millions, except per-share amounts)
Results (GAAP) | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $3,251 | | | $2,975 | | | $3,243 | | | 9% | | | — | |
Net Income (1) | | $104 | | | $209 | | | $281 | | | (50%) | | | (63%) | |
Diluted EPS | | $0.12 | | | $0.24 | | | $0.33 | | | (50%) | | | (64%) | |
(1) Represents GAAP net income attributable to Corning Incorporated.
Core Results (Non-GAAP) | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Core Sales (1) | | $3,604 | | | $3,258 | | | $3,482 | | | 11% | | | 4% | |
Core Net Income (1) | | $407 | | | $330 | | | $388 | | | 23% | | | 5% | |
Core EPS (1) | | $0.47 | | | $0.38 | | | $0.45 | | | 24% | | | 4% | |
(1) Core performance measures are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release as well as on the company’s website.
Second-Quarter 2024 Segment Results
(In millions)
The second-quarter results below are prepared on a basis consistent with Corning’s segment reporting as presented in the company’s consolidated financial statements.
Optical Communications | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $1,113 | | | $930 | | | $1,066 | | | 20% | | | 4% | |
Net Income | | $143 | | | $100 | | | $140 | | | 43% | | | 2% | |
In Optical Communications, second-quarter sales were $1.1 billion, up 20% sequentially, marking a return to growth. Year over year, sales increased 4%, reflecting record sales in the Enterprise portion of the business, which was up 42%, driven by AI-related connectivity solutions. Second-quarter net income was $143 million, up 43% sequentially, driven by strong incremental profit on the higher volume.
In the third quarter, Corning and Lumen Technologies reached an agreement that reserves 10% of Corning’s global fiber capacity for each of the next two years to facilitate Lumen’s build of a new network to interconnect AI-enabled data centers. This will be the first outside-plant deployment of Corning’s new generative-AI fiber and cable system, which enables Lumen to fit two to four times the amount of fiber into their existing conduit.
Display Technologies | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $1,014 | | | $872 | | | $928 | | | 16% | | | 9% | |
Net Income | | $258 | | | $201 | | | $208 | | | 28% | | | 24% | |
In Display Technologies, second-quarter sales were $1 billion, up 9% year over year. Net income was $258 million, up 24% year over year, reflecting higher volume and price.
Specialty Materials | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $501 | | | $454 | | | $423 | | | 10% | | | 18% | |
Net Income | | $63 | | | $44 | | | $33 | | | 43% | | | 91% | |
In Specialty Materials, second-quarter sales were $501 million, up 18% year over year, driven by continued strong demand for premium glass for mobile devices and semiconductor-related products. Second-quarter net income was $63 million, up 91% year over year.
Environmental Technologies | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $431 | | | $455 | | | $457 | | | (5%) | | | (6%) | |
Net Income | | $97 | | | $105 | | | $107 | | | (8%) | | | (9%) | |
In Environmental Technologies, second-quarter sales were $431 million, down 6% year over year, reflecting the impact of the Class 8 truck downcycle in North America, as anticipated. Net income was $97 million, down 9% year over year, on the decreased volume.
Life Sciences | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $249 | | | $236 | | | $231 | | | 6% | | | 8% | |
Net Income | | $17 | | | $13 | | | $11 | | | 31% | | | 55% | |
In Life Sciences, second-quarter sales were $249 million, up 8% year over year. Net income was $17 million, up 55% year over year.
Hemlock and Emerging Growth Businesses | | | | | | | | | | | | | | | |
| | Q2 2024 | | | Q1 2024 | | | Q2 2023 | | | Q/Q | | | Y/Y | |
Net Sales | | $296 | | | $311 | | | $377 | | | (5%) | | | (21%) | |
Net (Loss) Income | | ($23) | | | ($10) | | | $26 | | | (130%) | | | * | |
* Not meaningful
In Hemlock and Emerging Growth Businesses, second-quarter sales were $296 million, down 21% year over year, primarily reflecting lower pricing for solar-grade polysilicon.
Upcoming Investor Events
In the third quarter, Corning will attend the J.P. Morgan Hardware & Semis Management Access Forum on Aug. 14 and Citi’s 2024 Global TMT Conference on Sept. 5. Corning will host an investor visit to company facilities in September. Additionally, Corning will be scheduling management visits to investor offices in select cities. Visit the company’s Investor Relations website for up-to-date conference information.
Second-Quarter Conference Call Information
The company will host its second-quarter conference call on Tuesday, July 30, at 8:30 a.m. EDT. To participate, individuals may preregister here prior to the start of the call. Once the required fields are completed, click “Register.” A telephone number and PIN will be auto generated and will pop up on screen. Participants will have the choice to “Dial In” or have the system “Call Me.” A confirmation email will also be sent with specific dial-in information. To listen to a live audio webcast of the call, go to the company’s Investor Relations events page and follow the instructions.
Presentation of Information in this News Release
This news release includes non-GAAP financial measures. Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning’s non-GAAP financial measures exclude the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in the company’s operations. The company believes presenting non-GAAP financial measures assists in analyzing financial performance without the impact of items that may obscure trends in the company’s underlying performance. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found on the company’s website by going to the Investor Relations page and clicking “Quarterly Results” under the “Financials and Filings” tab. These reconciliations also accompany this news release.
With respect to the outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because management does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of management’s control. As a result, management is unable to provide outlook information on a GAAP basis.
Caution Concerning Forward-Looking Statements
The statements contained in this release and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” “target,” “estimate,” “forecast” or similar expressions are forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. Such statements relate to future events that by their nature address matters that are, to different degrees, uncertain. These forward-looking statements relate to, among other things, the company’s future operating performance, the company’s share of new and existing markets, the company’s revenue and earnings growth rates, the company’s ability to innovate and commercialize new products, the company’s expected capital expenditure and the company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the company’s manufacturing capacity.
Although the company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business and key performance indicators that impact the company, there can be no assurance that these forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws.
Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to: global economic trends, competition and geopolitical risks, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses’ global supply chains and strategies; changes in macroeconomic and market conditions and market volatility, including developments and volatility arising from health crisis events, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas, raw materials and other commodity prices and exchange rates (particularly between the U.S. dollar and the Japanese yen, New Taiwan dollar, euro, Chinese yuan and South Korean won), the availability of government incentives, decreases or sudden increases of consumer demand, and the impact of such changes and volatility on our financial position and businesses; the duration and severity of health crisis events, such as an epidemic or pandemic, and its impact across our businesses on demand, personnel, operations, our global supply chains and stock price; possible disruption in commercial activities or our supply chain due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, international trade disputes or major health concerns; loss of intellectual property due to theft, cyber-attack, or disruption to our information technology infrastructure; ability to enforce patents and protect intellectual property and trade secrets; disruption to Corning’s, our suppliers’ and manufacturers’ supply chain, equipment, facilities, IT systems or operations; product demand and industry capacity; competitive products and pricing; availability and costs of critical components, materials, equipment, natural resources and utilities; new product development and commercialization; order activity and demand from major customers; the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; the amount and timing of any future dividends; the effects of acquisitions, dispositions and other similar transactions; the effect of regulatory and legal developments; ability to pace capital spending to anticipated levels of customer demand; our ability to increase margins through implementation of operational changes, pricing actions and cost reduction measures; rate of technology change; adverse litigation; product and component performance issues; retention of key personnel; customer ability to maintain profitable operations and obtain financing to fund ongoing operations and manufacturing expansions and pay receivables when due; loss of significant customers; changes in tax laws, regulations and international tax standards; the impacts of audits by taxing authorities; the potential impact of legislation, government regulations, and other government action and investigations; and other risks detailed in Corning’s SEC filings.
