CORNING, N.Y. (WETM) — Corning Incorporated today announced results for the first financial quarter, which ended March 31, 2022, and provided its outlook for the second quarter and full year.
- GAAP and core sales were $3.7 billion; core sales grew 15% year over year, driven by strong sales growth in Optical Communications, Display Technologies, and Hemlock’s solar materials.
- GAAP EPS was $0.68; core EPS was $0.54, an increase of 20% year over year.
- The primary difference between GAAP and core EPS stemmed from non-cash, mark-to-market gains associated with the company’s currency-hedging contracts.
- Core gross margin and core operating margin grew sequentially and year over year to 36.6% and 17.6%, respectively. The improvements were primarily driven by benefits of previously announced pricing actions across all businesses.
- Free cash flow was $171 million for the quarter. The company continues to expect another year of strong cash generation.
- For the second quarter, Corning expects $3.7 billion to $3.9 billion in core sales with core EPS of $0.54 to $0.59.
- For the full year, management raised its expectations for sales to exceed $15 billion, with sales growing at a high-single-digit percentage and EPS growing up to a few percentage points faster than sales.
Wendell P. Weeks, chairman and chief executive officer, said, “We are off to an outstanding start in 2022, driven by broad-based strength across our businesses – led by 28% year-over-year sales growth in Optical Communications and continued favorable pricing in Display. In the first quarter, company sales grew 15% year over year, with EPS growing even faster at 20%. We successfully navigated a complex geopolitical and external operating environment, and our innovations and pricing actions contributed to improved profitability,”
Ed Schlesinger, executive vice president and chief financial officer, said, “In the first quarter, we executed well commercially, operationally, and financially. Our pricing actions began to take hold. Both gross and operating margins grew sequentially and year over year, despite increasing inflationary headwinds,” said
“Orders continue to be strong, and we expect the benefits of our pricing actions to accelerate in the second quarter. We remain focused on creating shareholder value in a dynamic and challenging external environment,” Schlesinger continued. “Our cohesive portfolio and ‘More Corning’ strategy create high-return opportunities and provide a clear pathway to multiyear profitable growth.”
Market-Access Platform Highlights
Corning holds a leadership position in each of the markets addressed by its five Market-Access Platforms.
- Optical Communications – Corning continues to capture growth, driven by increased spending on 5G and broadband projects, along with the accelerated pace of data center builds as applications rapidly move to the cloud. In the first quarter, Telstra InfraCo, Australia’s largest telecommunications company, announced that it is adding 20,000 new route kilometers to its national fiber network and will utilize Corning’s ultra-low-loss fiber with advanced bend. AT&T and Corning are launching a new training program to equip thousands of Americans with the manufacturing skills needed to design, engineer, and support a growing fiber broadband network across the United States and bring more broadband access to more Americans.
- Display – Corning is the industry leader in the display market with its global manufacturing footprint, cost leadership, and innovative technical capabilities. Display is delivering stabilized returns through favorable pricing and share growth from its new Gen 10.5 facilities. Looking ahead, the market for large-sized TVs is projected to grow at a double-digit compound annual growth rate through 2024. Corning is well positioned to meet growing demand as the leader in Gen 10.5, which provides the most economical approach for larger sets.
- Mobile Consumer Electronics –Corning continues to advance its objective of delivering more content and capturing higher revenue per device. During the quarter, Samsung launched the Galaxy S22 series, featuring Corning’s premium cover materials on the front and back of the devices – and on all five rear cameras on the Galaxy S22 Ultra. Corning has also seen additional benefits from continued adoption of new-to-the-world materials, such as Ceramic Shield, which is featured on Apple’s iPhone 13 and iPhone 12 series.
- Life Sciences –The company captured “More Corning” opportunities by advancing key innovations for cell- and gene-based therapies while building its portfolio of glass vials and tubing. Vial production was up 162% year over year. Corning’s portfolio, which includes its Corning Valor® Glass and new Corning Velocity® Vials, has enabled the delivery of approximately 5.5 billion doses of COVID-19 vaccines to date. Additionally, West Pharmaceutical Services announced a long-term supply agreement and multimillion-dollar technology investment in Corning to enhance injectable-drug packaging systems.
- Automotive – Corning is uniquely suited to address global trends toward cleaner, more connected, and autonomous vehicles as the company continues to pursue a $100-per-car content opportunity. Environmental Technologies is outperforming the market despite industry production constraints. Demand for Corning’s automotive glass solutions is growing, especially in automotive interiors, for which the company has been awarded over a billion dollars of business that spans multiple years.
More information on Corning Inc.’s first-quarter report can be found on Corning’s website.