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2007'02.11.Sun
Corning Announces Fourth-Quarter Results
January 25, 2007


Company Achieves Record Results in 2006
Highlights LCD and Diesel Products Growth for 2007


    CORNING, N.Y., Jan. 25 /Xinhua-PRNewswire/ -- Corning
Incorporated (NYSE: GLW) on Jan 24, 2007 announced
fourth-quarter sales of $1.37 billion and net income of
$646 million, or $0.41 per share.  The net income includes
net after-tax special gains of $158 million, or $0.10 per
share.

    (Logo:
http://www.xprn.com.cn:9080/xprn/sa/200612081746.jpg )

    Excluding these special gains, Corning's fourth-quarter
net income would have been $488 million, or $0.31 per share,
which exceeded the company's guidance for the quarter and
also the consensus of Wall Street estimates as compiled by
Thomson/First Call.  These are non-GAAP financial measures.
These and all non-GAAP financial measures are reconciled on
the company's investor relations Web site and in
attachments to this news release.

    "Our excellent fourth-quarter results capped an
outstanding full-year performance for Corning,"
Wendell P. Weeks, president and chief executive officer,
said.  "This was the fourth consecutive year that we
recorded significant improvement in the company's
profitability and we reached a new all-time record for net
income and earnings per share.  We are extremely pleased
with our 2006 performance and we believe we are well
positioned for continued growth and success in 2007." 
These are non-GAAP financial measures.

    Corning's fourth-quarter results included the following
non-cash special gains and charges:

     -- A $139 million pretax and after-tax gain primarily
to reflect the 
        decrease in the market value of Corning common
stock to be 
        contributed to settle the asbestos litigation
related to Pittsburgh 
        Corning Corporation. 
     -- Restructuring and impairment pretax and after-tax
charges of $44 
        million related to the company's Telecommunications
segment. 
     -- A $35 million reduction in income tax expense
related to the release 
        of the valuation allowance on certain deferred tax
assets in Germany.
     -- A $28 million increase in equity earnings resulting
from net 
        nonrecurring gains at Samsung Corning Co., Ltd., a
Korean 
        manufacturer of glass panels and funnels for
cathode ray tube (CRT) 
        television and computer monitors.

    Full-Year Operating Results

    For the full year, Corning recorded sales of $5.17
billion, an increase of 13 percent over 2005 sales of $4.58
billion.  The sales increase was the result of continuing
strong growth in Display Technologies and improvements in
most of the company's other business segments.  Corning had
net income of $1.86 billion, or $1.16 per share, versus $585
million, or $0.38 per share, in 2005. 

    Corning's net income for 2005 and 2006 included several
special gains and charges.  Excluding these items, Corning's
net income for 2006 increased 35 percent to $1.78 billion or
$1.12 per share compared to $1.32 billion or $0.86 per share
in 2005.  These are non-GAAP financial measures. The
company's 2006 results also include $81 million, or $0.05
per share, of stock compensation expense resulting from the
adoption of SFAS 123R at the beginning of 2006. 

    "Our Display Technologies business had an
excellent year.  Volume grew more than 50 percent on strong
shipments of larger-generation glass substrates. We are
especially pleased that we held our gross margin percentage
in 2006 compared to 2005 as strong cost reductions offset
price declines that were higher than our historical
trend," Weeks said. 

    He added, "Year-over-year, our Telecommunications
segment experienced sales gains of 6 percent.  Excluding
the impact of the shift of our Japanese business to an
equity affiliate, sales increased 10 percent.  The
Telecommunications segment also improved profitability,
before special items, for a second consecutive year.  We
sense that a broader recovery in the Telecommunications
industry may finally be underway."  These are non-GAAP
financial measures. 

     "We also had another excellent year at our equity
affiliates, particularly Dow Corning Corporation and Samsung
Corning Precision Glass Co., Ltd. (SCP), which drove a
significant increase in equity earnings," Weeks said.
Samsung Corning Precision is a 50-percent owned equity
company in Korea which manufactures LCD glass substrates. 

    Fourth-Quarter Operating Results

    Corning's fourth-quarter sales increased 7 percent over
third-quarter sales of $1.28 billion and by 14 percent over
last year's fourth-quarter sales of $1.2 billion. 
Fourth-quarter gross margin for the company remained strong
at 44 percent, comparable to the third quarter. 

    Including the $28 million net nonrecurring gains at
Samsung Corning, equity earnings for the fourth quarter
were $272 million compared to third-quarter equity earnings
of $232 million.  Absent this item, the fourth-quarter
equity earnings increase was the result of continued strong
performance at both Dow Corning and Samsung Corning
Precision. 

    Fourth-quarter sales for Corning's Display Technologies
segment were $619 million, a 19 percent increase over 2005
fourth-quarter sales of $518 million, caused by volume
growth of 48 percent which was partially offset by price
declines.  Sequentially, fourth-quarter sales increased 22
percent from third-quarter sales of $506 million as volume
increases of 28 percent were partly offset by price
declines of 5 percent. 

    Samsung Corning Precision's fourth-quarter glass volume
increased 43 percent year-over-year and 13 percent
sequentially.  Equity earnings from SCP were $147 million,
up 14 percent over last year and up 9 percent compared with
the third quarter. 

    Total LCD glass volume, including both Corning's wholly
owned business and SCP, increased 46 percent year-over-year
and 20 percent sequentially.  Net income for the Display
Technologies segment, which includes results of Corning's
wholly owned business and equity earnings from SCP,
increased 25 percent to $461 million in the fourth quarter
compared to $368 million in the fourth quarter of 2005, and
17 percent compared to the third quarter. 

    Weeks said, "As the year went on it became
apparent that television was becoming the primary driver
for LCD glass growth.  We estimate that LCD television
penetration reached 22 percent of the world market in 2006,
and preliminary retail sales figures indicate that one out
of every three TVs sold in the United States last year was
an LCD television. 

    "Greater than one-third of the total LCD glass
manufactured last year, measured in square footage, was
used to produce LCD televisions." Weeks added,
"In making this transition toward an industry driven
increasingly by television sales, we have learned a lot
about its seasonality patterns which should help us
effectively manage capacity in the future." 

    Fourth-quarter Telecommunications segment sales
declined by 11 percent to $404 million from $456 million in
the third quarter.  This fourth-quarter seasonal decline was
much less than the company had previously expected due to
strong demand from European and North American
telecommunications carriers. Year-over-year fourth-quarter
Telecommunications sales increased 5 percent. 

    In the fourth quarter, Environmental Technologies
segment sales increased slightly to $155 million from $153
million in the third quarter.  Life Sciences segment
fourth-quarter sales were $72 million, an increase over
third-quarter sales of $68 million. 

    Cash Flow/Liquidity Update

    Corning ended the fourth quarter with $3.2 billion in
cash and short-term investments, an increase over the $2.8
billion at the end of the third quarter. The company ended
2006 with total debt of $1.7 billion.  "We had
positive free cash flow of $540 million in 2006,"
James B. Flaws, vice chairman and chief financial officer,
said.  "Our board of directors has established a goal
to maintain a cash balance in excess of debt as a
protection against volatility in our markets.  The board
has also approved priorities for the use of any cash beyond
this level.  First, we will repay debt maturities within the
upcoming three years.  Second, we will earmark funds needed
for potential major new developments coming out of our
laboratories. After these priorities are achieved, the
board will consider share repurchases or the reinstatement
of dividend payments," he said. Free cash flow is a
non-GAAP financial measure. 

    Weeks added, "We believe we may be on the cusp of
a very productive decade of innovation at Corning.  It will
be extremely important that we have enough cash-on-hand to
fund the development of emerging technologies in our
laboratories.  Examples of such emerging technologies
include green lasers for mobile projection devices and
micro reactors for chemical processing." 

    2007 Market Outlook

    For 2007, Corning expects the overall LCD glass
substrate market to grow in the mid-30 percent range, with
an increase of at least 400 million square feet of glass
over last year's total volume.  The expected volume growth
for the year will be equal to or greater than the total
amount of LCD glass added to the market in 2006. Corning
said that its LCD glass volume is expected to grow at the
upper end of this range, while SCP's volume may be slightly
lower than the range.  Growth rates by region, and thus by
Corning's wholly owned business and SCP, may be different
based on market dynamics. 

    Corning said that LCD televisions should reach 33
percent of the global television market or approximately 68
million units in 2007.  This would be a significant increase
over the estimated 22 percent penetration rate or 43 million
units produced last year.  "This nearly 60 percent
increase in television units produced, coupled with an
increase in average screen size, may result in almost half
of all the LCD glass produced this year going to the
television market," Flaws said. 
    
    Corning also expects it will see significant growth in
its heavy-duty diesel products this year due to the new
U.S. emissions regulations which became effective on
January 1, 2007.  Diesel products are a part of Corning's
Environmental Technologies segment. The company expects
that diesel product sales should increase by more than 60
percent from the $164 million of sales in 2006.  This sales
ramp is expected to be stronger in the second half of the
year. 

    First-Quarter Outlook

    Corning said that it expects first-quarter sales to be
in the range of $1.26 billion to $1.31 billion and earnings
per share (EPS) in the range of $0.24 to $0.27, before
special items.  This EPS estimate is a non-GAAP financial
measure and excludes any possible special items.  The gross
margin percent for the first quarter is expected to be 43
percent to 45 percent.  The company also expects that its
effective tax rate for the first quarter will be in the
range of 15 percent to 18 percent. 

    In its Display Technologies segment, Corning said that
first-quarter sequential glass volume for both its wholly
owned business and Samsung Corning Precision will be down
10 percent to 15 percent compared to the fourth quarter.
Flaws said, "This sequential volume decline reflects
the seasonality of the LCD TV market as television becomes
a larger part of the LCD industry. Historically, the color
television end market has seen 55 percent of total sales
occur in the second half of the year.  Retail sales of LCD
televisions are more weighted in the second half due to the
rapid increase in penetration. 
    
    "We anticipate that this seasonality decline may
fall more heavily on Corning in quarter one due to our
overall market share and our new pricing strategy.  We
expect to see our total glass volume increase significantly
as the market expands in the second half of this year. 
Additionally, we are encouraged that the LCD industry
appears to be operating at lower levels during the first
quarter in order to avoid a repeat of last year's panel
inventory buildup which caused significant disruption in
the LCD supply chain." 

    Price declines of one percent to two percent are
expected in the first quarter for Corning's wholly owned
business.  At SCP, first-quarter price declines are
anticipated to be higher and any subsequent declines are
expected to be moderate for the remainder of the year. 

    Flaws said there are a number of factors contributing
to Corning's overall belief that it will be able to achieve
lower price declines this year than in 2006. 
"First," he said, "last year's first-quarter
inventory buildup by panel manufacturers and the subsequent
inventory correction, along with the introduction of
significantly more Gen 6 and larger capacity by
competitors, were major contributors to the higher than
historical price declines in 2006. Second, we are using a
new pricing strategy by offering lower price declines in
the first part of the year, when demand is seasonally
weaker, in order to maintain higher prices in the second
half of the year, when we believe that LCD glass will be in
tight supply." 

    Corning said that lower first-half capacity
requirements will allow the company to make necessary
melting tank repairs and improvements and accelerate its
transition to its environmentally green EAGLE XG(TM) glass
composition. 

    Corning's Telecommunications segment first-quarter
sales are expected to increase modestly over the previous
year and sequentially due to increased demand in North
America and Europe.  "We are beginning to feel much
better about the growth opportunities in the
telecommunications industry," Flaws said, "We
expect to see earnings improvement for the full year."


    The company's Environmental Technologies segment sales
are expected to increase about 5 percent from the fourth
quarter of last year due to seasonally stronger automotive
sales and a modest increase in diesel products sales. 
Sales for the Life Sciences segment should be up slightly
from the fourth quarter of 2006. 

    Equity earnings for the first quarter are expected to
decline 25 percent to 30 percent due to the lower earnings
from Samsung Corning Precision and the absence of the
fourth quarter nonrecurring gain at Samsung Corning. 

     "Seasonality factors across a number of our
businesses will have an impact in the first quarter but we
believe that Corning is well-positioned to achieve another
full year of sales and earnings growth. At the same time,
we will continue to make the necessary investments in
innovation and research that should lead to the next
generation of successful products to ensure the long-term
success of Corning," Weeks said. 

    Fourth-Quarter Conference Call Information

    The company will host a fourth-quarter conference call
at 8:30 a.m. EDT on Wednesday, Jan. 24.  To access the
call, dial (210) 234-0002.  The password is QUARTER FOUR. 
The leader is SOFIO.  A replay of the call will begin at
approximately 10:30 a.m. EDT, and will run through 5 p.m.
EDT, Wednesday, Feb. 7.  To listen, dial (203) 369-3852. No
pass code is required. To listen to a live audio webcast of
the call, go to Corning's Web site:
http://www.corning.com/investor_relations, and follow the
instructions.  The audio ebcast will be archived for one
year following the call. 

    Presentation of Information in this News Release

    Non-GAAP financial measures are not in accordance with,
or an alternative to, GAAP.  Corning's non-GAAP net income
and EPS measure excludes restructuring, impairment and
other charges and adjustments to prior estimates for such
charges.  Additionally, the company's non-GAAP measure
excludes adjustments to asbestos settlement reserves
required by movements in Corning's common stock price,
gains and losses arising from debt retirements, charges
resulting from the impairment of equity or cost method
investments, or adjustments to deferred tax assets, and
gains or losses recognized in equity earnings from
restructuring, impairment or other charges or credits taken
by equity method companies.  Corning's free cash flow
financial measures are also non-GAAP measures. The company
believes presenting non-GAAP free cash flow; net income and
EPS measures are helpful to analyze financial performance
without the impact of unusual items that may obscure trends
in the company's underlying performance.  These non-GAAP
measures are reconciled on the company's Web site at
http://www.corning.com/investor_relations and accompany
this news release. 

    About Corning Incorporated

    Corning Incorporated ( http://www.corning.com ) is a
diversified technology company that concentrates its
efforts on high-impact growth opportunities. Corning
combines its expertise in specialty glass, ceramic
materials, polymers and the manipulation of the properties
of light, with strong process and manufacturing
capabilities to develop, engineer and commercialize
significant innovative products for the telecommunications,
flat panel display, environmental, semiconductor, and life
sciences industries. 

    Forward-Looking and Cautionary Statements

    This press release contains forward-looking statements
that involve a variety of business risks and other
uncertainties that could cause actual results to differ
materially.  These risks and uncertainties include the
possibility of changes in global economic and political
conditions; currency fluctuations; product demand and
industry capacity; competition; manufacturing efficiencies;
cost reductions; availability of critical components and
materials; new product commercialization; changes in the
mix of sales between premium and non-premium products; new
plant start-up costs; possible disruption in commercial
activities due to terrorist activity, armed conflict,
political instability or major health concerns; adequacy of
insurance; equity company activities; acquisition and
divestiture activities; the level of excess or obsolete
inventory; the rate of technology change; the ability to
enforce patents; product and components performance issues;
stock price fluctuations; and adverse litigation or
regulatory developments.  Additional risk factors are
identified in Corning's filings with the Securities and
Exchange Commission.  Forward-looking statements speak only
as of the day that they are made, and Corning undertakes no
obligation to update them in light of new information or
future events. 

    Attached File: 

    CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(
http://www.corning.com/media_center/press_releases/2007/2007012401.pdf
)



    For more information, please contact:

    Media Relations Contact:

    Corning China                                  
     Lydia Lu                                           
     Tel :  +86-21_5467-4666-1900      
     Email: lulr@corning.com                
    
    US Corning
     Daniel F. Collins
     Tel :   +1-607-974-4197
     Email: collinsdf@corning.com

    Investor Relations Contact:

     Kenneth C. Sofio
     Tel:   +1-607-974-7705
     Email: sofiokc@corning.com


SOURCE  Corning Incorporated
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