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To: E.J. Neitz Jr who wrote (38275)	2/7/2002 9:04:56 AM
From: E.J. Neitz Jr	Read Replies (1) \| Respond to of 53068

CSFB Report---Corning CORNING INCORPORATED (GLW: $6.70) 02/07/02 GLW Analyst Day Preview Rating: HOLD 12-Mo. Target: N/A Analyst Day Details February 8, 10 a.m. to 12:30 p.m EST. Expect 5-10% sequential decline in the March Q. We expect management to guide to revenues down 5%-10% sequentially for the March Q and offer no outlook beyond the Mar Q. We are currently modeling revenues for GLW down 2.5% Q-Q and 36.2% for F2002. Telecom still difficult. We are currently modeling FY02 telecom revenue down 51% Y-Y. We believe that GLW's current fiber production rate is insufficient to meet these targets. We believe GLW has little visibility into the revenue ramp we are modeling for 2H:02. The CSFB wireline equipment team is modeling transmission sales down 57% Y-Y. Given current carrier spending patterns, we would expect equipment sales to recover in advance of fiber. For the Mar Q, we are currently modeling telecom sales down 4% Y-Y. We believe GLW may reduce this somewhat given the 23% avg. decline seen by system suppliers. Information Display Strong, Mar Q possibly down on seasonality. We are currently modeling a 3% Q-Q growth. We believe that there may be some downside to this due to normal seasonal weakness in March. We continue to believe that GLW is strong in this segment and view our modeled 11% Y-Y growth as challenging but achievable. Advanced Materials Flat to Down. We believe that the semiconductor portion of the business will be down slightly in 2002 while we expect a more significant decline in new vehicle linked catalytic converter substrates. Overall, we are modeling 2002 down 7.5%. Valuation. Given the uncertainty of the duration of the downturn and the high-fixed cost nature of fiber manufacturing, we believe GLW's fundamentals could face continued pressure in the near-term. We believe this pressure may be magnified by the company's high debt load and recent downgrade in debt rating to BBB- from BBB by Fitch Ratings. GLW is trading at 2.2x TEV/2002S, compared to its peers, which trade at 2.9x.