Corning Announces First-Quarter Results
CORNING, N.Y.--(BUSINESS WIRE)--April 22, 2002--Corning Incorporated (NYSE:GLW - news) today announced that its first-quarter net loss was $90 million or $0.10 per share, a decline from 2001 first quarter net earnings of $132 million, or $0.14 per share, which included after-tax goodwill amortization of $136 million, or $0.15 per share.
``We are somewhat encouraged by the general direction of the results for the quarter. Sales began to stabilize compared to the quarter-to-quarter declines last year. Performance improved in our Environmental Technologies and Life Sciences businesses and the Display Technologies business continued its strong growth. Results were also favorably impacted by our cost savings actions. Unfortunately, the telecommunications market remains weak and continues to dampen our results,'' James B. Flaws, Corning's chief financial officer, said.
First-quarter Operating Results
First-quarter sales were $898 million, compared with $1.9 billion during the same period last year primarily due to the major falloff in the telecommunications segment. The rate of decline in Corning's sales slowed substantially in the first quarter as sales were 8% below fourth quarter 2001 sales of $974 million. In comparison to 2001, fiber and cable sales continued to be negatively impacted by the global slowdown in the telecommunications sector. However, kilometer shipments of optical fiber to cablers grew 10% to 15% for the first quarter of 2002 compared with the fourth quarter of 2001, in line with the company's guidance, and shipments from Corning Cable Systems were also up in the same range.
Continued demand for notebook computers and flat panel desktop monitors drove a 16% sequential increase in volume of liquid crystal glass in the quarter. However, the translation impact of the weak yen resulted in consolidated sales for the Display Technologies business consistent with the fourth quarter of 2001. First-quarter sales for the Environmental Technologies business increased 11% over last year's fourth- quarter sales as U.S. auto manufacturers replenished inventory.
``We were very pleased to see the benefit of our restructuring actions from last year show up in reduced operating expenses compared with the fourth quarter of last year,'' Flaws said. Corning also noted that manufacturing cost reductions and the resumption of fiber production in the first quarter resulted in the sequential improvement in the company's gross margins.
Corning reported that it had $1.8 billion in cash and short-term investments at the end of the first quarter, down from $2.2 billion at the end of last year. The decline in cash and short-term investments includes approximately $140 million of net debt repayments and $60 million of restructuring payments.
Second-Quarter Outlook
The company expects second-quarter sales of approximately $900 to $925 million and a net loss similar to the first quarter's results, excluding previously announced restructuring charges. Corning said it anticipates continued growth in its liquid crystal display business with the increase in the popularity of flat-panel desktop monitors. The Advanced Materials segment is expected to post modest gains in line with general economic improvements. Shipments of fiber are expected to be consistent with the first quarter sequential volume growth of 10 to 15%. Price pressure is expected to erode these volume gains. Corning expects revenues in the Photonics Technologies business to continue to be very weak.
Last week, the company announced that it plans a new series of restructuring actions to further reduce costs that will result in total restructuring and impairment charges in the range of $600 million pretax spread over the second and third quarters. Flaws said, ``While we have not reached any specific decisions on our actions, we must adjust our cost structure to meet the new realities of today's marketplace. We will be making specific announcements over the course of the second quarter which will outline details of our restructuring program.''
James R. Houghton, chairman and chief executive officer, said, ``At its core, Corning is a technology company with a leadership position in telecommunications and the optical revolution. We intend to strengthen our industry leadership position and we will continue investing in technologies to build the next generation of optical solutions. We also are committed to protecting and extending our technological advantage as the world's leading producer of glass substrates for flat panel displays, and leading-edge solutions for environmental technologies.''
``In order to do so, the first priority of our new management team and the employees of Corning will be to return this company to profitability in 2003,'' he concluded.
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. Corning revenues for 2001 were $6.3 billion.
Conference Call Information
The company will host a conference call at 8:30 a.m. EST on Tuesday, April 23, 2002. To access the call, dial 712-271-0936. The password is Earnings. The leader is Dietz. A replay of the call will begin at approximately 10:30 a.m. and will run through 5 p.m. EST on Monday, May 6, 2002. To access the replay, dial 402-998-0863; 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.
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.
biz.yahoo.com |
