Corning Reports Fourth-Quarter Results
CORNING, N.Y.--(BUSINESS WIRE)--Jan. 23, 2002--Corning Incorporated (NYSE:GLW - news) today reported a fourth-quarter pro forma net loss of $261 million, or $0.28 per share, down significantly from pro forma earnings of $307 million, or $0.33 per share, for the fourth quarter of 2000. The quarter results include pre-tax operating charges, announced last week, totaling $178 million ($109 million after-tax), or $0.12 per share.
``Over the course of the second half of 2001, we took a series of tough restructuring actions that improved our competitive position,'' John W. Loose, Corning's president and chief executive officer, said. ``We lowered inventories significantly, reduced our capital expenditures, resized our organization through the elimination of 12,000 positions and idled and closed a number of manufacturing operations. We are focused on returning Corning to profitability,'' Loose said.
Fourth-quarter Operating Results
Fourth-quarter sales were $974 million, less than half of the $2.1 billion reported in the fourth-quarter of 2000. Sales and earnings declines were led by the Telecommunications segment, which reported sales declines of 65% versus last year and operated at a loss for the quarter. Optical fiber and cable sales decreased significantly as demand for optical fiber was extremely weak in the quarter. This prompted significant slowdowns in cable manufacturing operations and the idling of most of the company's fiber manufacturing facilities in November and December. The company announced earlier this month that it is recalling some workers to resume manufacturing operations in its fiber production facilities beginning this week.
Weak global economic conditions also impacted Corning's other businesses. Fourth-quarter sales and earnings of Corning's Advanced Materials segment declined due primarily to weak sales in its environmental and semiconductor businesses. The Information Display segment also recorded lower sales and earnings in the fourth-quarter driven primarily by weakness in its conventional television business.
With these fourth-quarter results, pro forma earnings per share for the full year were $0.17, compared with $1.22 per share in 2000. Sales for the full year totaled $6.3 billion, a decrease of 12% compared with $7.1 billion in 2000.
The company ended the year with $2.2 billion in cash and continues to have additional liquidity with $2 billion of committed and unused revolving credit lines.
Restructuring Actions
In the fourth quarter, Corning recorded a pre-tax charge of $614 million ($363 after-tax and minority interest) related to restructuring actions which were part of the previously announced program totaling $961 million for the year. Approximately one third of the total charges for the program will be paid in cash. Corning expects to realize annualized savings from the program of approximately $400 million.
Fourth-Quarter and Calendar Year Results
With the charges for restructuring actions and amortization of goodwill, Corning's net loss for the quarter was $655 million, or $0.69 per share, compared with a net loss of $58 million, or $0.08 per share, from continuing operations for the fourth quarter of 2000.
Including charges for restructuring actions, amortization of goodwill, and the second-quarter impairment of goodwill and intangible assets, Corning reported a full-year 2001 loss of $5.5 billion, or $5.89 per share, compared to net income from continuing operations of $409 million, or $0.46 per share in 2000.
Outlook
James B. Flaws, Corning's chief financial officer, said, ``While we continue to experience weakness in demand across our telecommunications businesses, we are beginning to sense a settling in the market that suggests we may see improved demand in the second half of this year.'' He also said the company will not provide guidance for its 2002 financial performance at this time, but it will discuss its expectations for the first quarter of 2002 at its investor meeting on February 8, 2002 at the Plaza Hotel in New York City and simultaneously via audio webcast.
``This past year was extremely challenging for everyone in the telecommunications industry,'' Loose said. ``At Corning, we believe in our optical layer strategy and will continue to invest in and build a product and business portfolio which will make us an even stronger player in the optical networking market. We are also excited about a number of emerging technologies in our Advanced Materials segment and we believe our liquid crystal display business is poised for a strong year,'' Loose said.
Conference Call Information
The company will host a conference call at 8:30 a.m. EST on Thursday, January 24, 2002. To access the call, dial 312-470-0014. The password is Corning. The leader is Dietz. A replay of the call will begin at approximately 10:30 a.m. and will run through 5:00 p.m. EST on Wednesday, February 6, 2002. To access the replay, dial 402-220-3523; a password is not required. To listen to a live audio webcast of the call, go to corning.com and follow the instructions. The webcast will be archived on the corning.com site for 14 days following the call.
Pro Forma Statement
Pro forma net income excludes impairment and amortization of goodwill, restructuring actions, purchased in-process research and development, one-time acquisition costs, discontinued operations and other non-recurring items.
About Corning Incorporated
Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television, information technology and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets.
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 conditions; currency exchange rates; product demand and industry capacity; competitive products and pricing; 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 telecommunications industry and other business segments; the mix of sales between premium and non-premium products; possible disruption in commercial activities due to terrorist activity and armed conflict; ability to obtain financing and capital on commercially reasonable terms; acquisition and divestiture activities; the level of excess or obsolete inventory; the ability to enforce patents; product and components performance issues; and litigation. 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.
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