Corning Outlines Growth Businesses

Corning Outlines Growth Businesses

February 13, 2007

LCD TV Drives Glass Volume Increases Company Reviews New
Technology Opportunities

    CORNING, N.Y., Feb. 13 /Xinhua-PRNewswire/ -- Growing
demand for liquid crystal display (LCD) television,
increased regulatory requirements for reduced diesel engine
emissions and expanding broadband capabilities are critical
drivers of Corning Incorporated's (NYSE: GLW) long-term
growth strategy, Wendell P. Weeks, president and chief
executive officer, will tell investors on Feb 9th, 2007.

    Weeks and other senior executives will present
Corning's view on the markets it serves at the company's
annual investor relations meeting to be held at the
Mandarin Oriental Hotel in New York City beginning at 9
a.m. on Feb 9, 2007.  The presentations will also be
broadcast live via the company's Web site. 

    In his opening remarks Weeks will say, "Last year
at this meeting I said that 2006 would be a year of
execution and a year that would tell us a lot about our
business strategy.  I think that our record performance for
net income and earnings per share last year and progress in
our key growth businesses demonstrates that we
succeeded." 

    "As we look forward to 2007 and beyond,"
Weeks will say, "The future of Corning appears bright.
 We are committed to maintaining our global leadership in
LCD glass, gaining the majority share of the emerging
heavy-duty diesel emissions control market opportunity, and
capturing the growth which is returning to the
telecommunications industry.  Our goal is to deliver
another year of growth to our shareholders." 

    "Corning also has some very exciting growth
opportunities well beyond those of 2007," Weeks will
add.  "We are pleased to be able to share with you
today just a few of the many new technologies in
development in our very robust innovation pipeline." 

    Growth Opportunities

    Display Technologies

    Peter F. Volanakis, chief operating officer, will
explain to investors that the rapid decline in retail
pricing and subsequent increase in consumer demand for LCD
televisions will drive annual LCD glass market demand to
nearly two billion square feet by 2008.  "This
represents a compound annual growth rate of about 30
percent," he will say.  "It is our belief that
LCD TV penetration should reach 33 percent of the global
color television market this year, and 45 percent by
2008."  Volanakis will point out that the majority of
glass volume growth will be fueled by both the popularity
of LCD televisions and the movement to larger screen sizes.
 The average LCD screen size will grow to nearly 32 inches
in 2008 from the average 28 inches on Feb 9, 2007. 

    "We believe that by 2008, LCD glass demand for
televisions alone will be nearly equal to the size of the
entire glass market in 2006," Volanakis will say. 
Worldwide LCD glass demand reached 1.2 billion square feet
last year.  He will also tell investors that by 2010, LCD
will be the leading television technology, surpassing the
cathode ray tube in worldwide unit sales. "The
penetration rate of LCD television in North America should
reach 61 percent and in Japan, nearly 90 percent by 2008. 
We also expect to see significant penetration of LCD TVs in
the developing Chinese market.  In fact, we believe that by
2010, the Chinese LCD TV market will be about the size of
the North American market," he will say. 

    Volanakis will also point out that LCD is rapidly
gaining share in the 40-inch and larger TV segment as
leading TV brands shift to LCD technology and as consumers
recognize LCD's performance benefits in 1080p
high-definition (full HD) format.  And, Volanakis will
outline Corning's abilities to address the seasonality
inherent in the LCD TV market, encouraging investors to
watch long-term end market trends rather than reacting to
short-term supply chain news. 

    Corning expects notebook penetration to reach as much
as 40 percent of total personal computers sold, and LCD
monitors to exceed 90 percent of the desktop market by
2008, Volanakis will also note.  Adding to this LCD glass
demand will be an anticipated growth rate in excess of 20
percent from 2006 to 2008 for small handheld devices. 

    Diesel Products
    "We are expecting significant growth in our diesel
products business in 2007, driven by our leadership position
in the U.S. heavy-duty vehicle market and continued
expansion into the light-duty business," Thomas R.
Hinman, senior vice president and general manager, Corning
Diesel Technologies, will tell investors.  "We believe
we can grow our diesel products revenue by more than 60
percent this year and have the potential to realize $500
million to $600 million in revenue by 2010." 

    Hinman will remind investors that new U.S. diesel
engine standards that went into effect on January 1, 2007
require all heavy-duty engines to utilize a filter system
solution that will greatly reduce particulate matter (PM)
and nitrogen oxides (NOx) emissions.  "Global
emissions regulations will continue to tighten and drive
demand for our advanced diesel products solutions," he
will say. 

    "This is a milestone year as heavy duty represents
the first significant growth opportunity for our diesel
business," Hinman will point out.  "We expect
another wave of growth as the U.S., Europe and Japan
implement more stringent emissions standards for light-duty
and heavy-duty applications.  Non-road vehicles represent a
third revenue opportunity at the end of this decade.  We
believe Corning is well positioned to lead in all three
areas," he will tell investors. 

    "We expect the market opportunity could reach $900
million for each of the heavy-duty and light-duty diesel
application segments by 2012.  In looking at this on a
projected product value basis, the global opportunity for
heavy duty is expected to be approximately $340 per vehicle
this year, and may reach as much as $475 per vehicle by
2012," Hinman will add. 

    Telecommunications

    Larry Aiello, president and chief executive officer,
Corning Cable Systems, will tell investors that Corning has
seen a steady improvement in its Telecommunications segment
results over the past several years.  "We expect this
trend to continue in 2007," he will state.  Aiello
will say that the nearly universal goal of providing
triple-play (voice, video and data) bundled services, along
with the emergence of high-definition television and
improved telephony offerings will drive network expansions
and improvements through the remainder of the decade. 

    "Corning's core competencies and innovation track
record position us well to solve key challenges in the
access networks," Aiello will say.  "We expect to
introduce a suite of new optical fiber and cable, as well as
hardware and equipment products this year that can
dramatically reduce the labor costs for network
installations in multi-dwelling units.  This has the
potential of creating a significant new revenue stream for
our Telecommunications segment in the future," Aiello
will tell investors. From 2003 to 2006, the introduction of
numerous product innovations enabled the company to gain a
strong position in the access market while providing more
than $500 million of savings to Corning's
telecommunications customers. 

    Emerging Technologies

    Joseph A. Miller, chief technology officer, will review
Corning's sustained investment in innovation to provide
longer term growth for the company.  "We believe that
we are heading into one of the most promising periods of
Corning innovation," Miller will say. 
    
    "The rich portfolio of research and development
projects tied to the company's current growth platforms in
display, diesel, telecommunications and life sciences are
expected to provide significant growth over the next
several years," Miller will say.  "Reaching
beyond these near-term growth areas, we have multiple
emerging technologies that have the potential to provide
Corning with its next wave of growth." 

    A few of these promising new technologies to be
highlighted by Miller include microreactors, silicon on
glass and synthetic green lasers.  These technologies are
still in the early stage of development and it is difficult
to predict when or if the company will see commercial
success, Miller will explain. 

    Corning has developed proprietary microreactor
technology that is optimized for the manufacture of
high-value specialty, fine, and pharmaceutical chemicals. 
These modular, uniquely formed glass structure assemblies
are tailored to customer reaction specifications and enable
key benefits to customers in the chemical reaction industry
in terms of scalability, cost reduction and improved
yields. 

    Still in the early stages of the company's innovation
process is a technology known as silicon on glass or SiOG. 
In this area, Corning is evaluating various processes to
deposit high-performance silicon films onto Corning display
glass and transform the glass into an engineered substrate
or electronic backplane onto which electronic circuits can
be easily added by display glass customers. 

    Corning has also developed compact, high-speed,
powerful and efficient green laser technology.  The
company's synthetic green laser is uniquely designed to
enable ultra-compact and ultra-efficient projection
capabilities for entirely new viewing experiences through
mobile consumer electronic devices. 

    Financial Outlook
    "Corning's strong balance sheet and cash flow
provide ample liquidity to fund the current and next waves
of growth opportunities that you have heard about
today," James B. Flaws, vice chairman and chief
financial officer, will note.  "Our goal is to have
free cash flow in excess of $400 million in 2007." 

    Corning's clearly defined priorities for the management
of the company's strong balance sheet will be reiterated by
Flaws.  "Being mindful of lessons learned from the
telecom bubble, we will continue to maintain significant
cash balances.  In the near term, our cash balance will be
determined by our outlook for capital expenditures for our
growth initiatives, investments in research and development
and funding of new business opportunities.  During 2007, our
board of directors will evaluate whether to use any excess
cash to initiate a stock repurchase program or to reinstate
dividends on our common stock." 

    Flaws will tell investors that capital expenditures are
expected to be in the range of $1.1 billion to $1.2 billion
in 2007. He also will say that foreign exchange rates have
the potential to impact the company's sales and net income,
noting that 68 percent of the company's sales occur outside
the United States and that all LCD glass sales are
transacted in Japanese yen. 

    "Dow Corning Corporation, our 50-percent equity
company, will continue to be a strong contributor to
Corning's overall growth," he will say.  "Dow
Corning recorded more than $4 billion in sales last year
and they expect to grow at a rate of 6 percent to 8 percent
in 2007. We believe Dow Corning will provide Corning with a
strong base of equity earnings and flow of dividends going
forward," he will say. 

    First-Quarter Outlook

    Corning will reaffirm its first-quarter guidance for
sales in the range of $1.26 billion to $1.31 billion and
earnings per share of $0.24 to $0.27 before special items. 
This is a non-GAAP financial measure. This and all non-GAAP
financial measures are reconciled on the company's investor
relations Web site and in attachments to this news release.


    The company expects first-quarter gross margin to be in
the range of 43 percent to 45 percent.  Equity earnings in
the first quarter are expected to be down 25 percent to 30
percent, due primarily to seasonally lower demand and lower
prices at Samsung Corning Precision Glass Co., Ltd. Samsung
Corning Precision is a 50-percent owned equity company in
Korea which manufactures LCD glass substrates. 
    
    In detailing first-quarter business expectations, Flaws
will note that Corning expects its total LCD glass volume to
decline sequentially between 10 percent and 15 percent.  He
will explain that the decline is due primarily to the
seasonality of the LCD TV market, which is becoming a
significantly larger portion of the overall LCD glass
business.  The company will remind investors that it
expects first-quarter LCD glass pricing to decline one
percent to two percent for its wholly owned business. 
Pricing at Samsung Corning Precision Glass Co., Ltd is
expected to be down more than Corning's wholly owned
business. 

    Corning anticipates that first-quarter sales in its
Telecommunications, Environmental Technologies and Life
Sciences segments will increase slightly compared to last
year's fourth-quarter sales. 

    Concluding his remarks, Flaws will say that,
"Corning has long-term financial goals to grow the
company significantly faster than the economy. However, as
a technology company that places big bets on research and
development, we caution that this growth may not be smooth.
 We intend to invest wisely as we pursue this growth and
have our return on invested capital exceed our cost of
capital.  We believe that our strategy will bring excellent
returns to our shareholders over time." 

    Conference Broadcast Information
    Corning will make the presentation at its annual
investor conference available to the public by webcast and
telephone access.  The broadcast will be held Friday, Feb.
9, 2007 at 9 a.m. EST.  The dial-in number is (210)
234-0003.  The password is investor.  The leader is Mr. Ken
Sofio.  A replay of the call will begin at approximately
1:30 p.m. and will run through 5 p.m. EST on Friday, Feb.
23, 2007.  To access the replay, dial [phone]; a
password is not required.  A live audio webcast will be
available at http://www.corning.com/investor_relations .
The audio webcast 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 the
world leader in specialty glass and ceramics.  Drawing on
more than 150 years of materials science and process
engineering knowledge, Corning creates and makes keystone
components that enable high-technology systems for consumer
electronics, mobile emissions control, telecommunications
and life sciences.  Our products include glass substrates
for LCD televisions, computer monitors and laptops; ceramic
substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug
discovery; and other advanced optics and specialty glass
solutions for a number of industries including
semiconductor, aerospace, defense, astronomy and metrology.


    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 or fluctuations in global economic
and political conditions; tariffs, import duties and
currency fluctuations; product demand and industry
capacity; competitive products and pricing; manufacturing
efficiencies; cost reductions; availability and costs of
critical components and materials; new product development
and commercialization; order activity and demand from major
customers; capital spending by larger customers in the
liquid crystal display industry and other businesses;
changes in the mix of sales between premium and non-premium
products; facility expansions and new plant start-up costs;
possible disruption in commercial activities due to
terrorist activity, armed conflict, political instability
or major health concerns; ability to obtain financing and
capital on commercially reasonable terms; adequacy and
availability of insurance; capital resource and cash flow
activities; capital spending; equity company activities;
interest costs; 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; changes in key
personnel; stock price fluctuations; and adverse litigation
or regulatory developments.  These and other 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 RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO
GAAP FINANCIAL MEASURE (
http://www.corning.com/media_center/press_releases/2007/Non-GAAP_for_IR_2007020901.pdf
)


    Media Relations Contact:

    Corning China                     US Corning
     Lydia Lu                          Daniel F. Collins
     Tel:   [phone]-1900      Tel:  
[phone]
     Email: [e-mail]           Email:
[e-mail]

    Investor Relations Contact:
     Kenneth C. Sofio
     Tel:   [phone]
     Email: [e-mail]


SOURCE  Corning