Corning Reports Q1Corning Reports Q1

CORNING, N.Y. -- Corning Incorporated (NYSE: GLW) today announced first-quarter sales of $1.05 billion, with net income of $249 million, or $0.17 per share. The company's first-quarter results exceeded its sales guidance and far exceeded its guidance for earnings.

"We are extremely pleased with our overall results and we believe that we are well positioned to take advantage of continuing growth opportunities," James R. Houghton, chairman and chief executive officer, said.

First-Quarter Operating Results

Corning's first-quarter sales of $1.05 billion increased 2 percent over last year's fourth-quarter sales of $1.033 billion, and increased 24 percent over last year's first-quarter sales of $844 million. Gross margin for the first quarter improved to 41 percent versus 35 percent in the previous quarter. About half of the first-quarter sequential improvement in gross margin was due to stronger operating performance in all the company's operating segments, particularly Display Technologies and Environmental Technologies. The remainder was due to the absence of a number of unusual items which occurred in the fourth quarter.

Equity earnings for the first quarter were $166 million, an increase of 25 percent over fourth-quarter equity earnings of $133 million. The sequential increase was primarily due to Dow Corning Corporation, which experienced strong volume growth, improved pricing and favorable exchange rates. Corning's equity earnings from Dow Corning were $68 million in the first quarter, nearly doubling fourth-quarter equity earnings of $35 million.

Corning recorded $320 million in first-quarter sales in its Display Technologies segment, a 3 percent increase over last year's fourth-quarter sales of $311 million. The sequential sales increase was primarily driven by a 5 percent volume increase and a favorable Japanese yen exchange rate, offset by average glass pricing declines of less than 4 percent. Sequential first-quarter volume and pricing were within the company's guidance. Volume grew approximately 35 percent and average pricing was flat in comparison to a year ago.

Samsung Corning Precision Glass Co. Ltd., a 50-percent equity venture in Korea, increased its sequential glass volume by 6 percent. In comparison to a year ago, volume at Samsung Corning Precision was up 44 percent in the first quarter. Equity earnings from Samsung Corning Precision were $80 million for the first quarter, compared to $73 million last quarter.

Total volume in the Display Technologies segment, including both Corning's wholly-owned business and Samsung Corning Precision, increased 6 percent sequentially in the first quarter. Net income for the Display Technologies segment was $161 million in the first quarter, compared to $151 million in the fourth quarter.

Wendell P. Weeks, president and chief operating officer, said, "In the first quarter, we saw increased indications that panel manufacturers are continuing to ramp up capacity for larger-generation (Gens. 5, 6 and 7) panel sizes. We are pleased to report that we have signed four additional long-term supply agreements for liquid crystal display (LCD) glass that include customer deposits. We now have five long-term supply agreements with customer deposits, a clear indication that our customers continue to see Corning as the first choice for meeting their large-size glass needs."

Corning Inc.