Material science firm Corning (NYSE:GLW) stock jumped after it raised second-quarter guidance.The maker of fiber optic cabling is now considered an artificial intelligence (AI) play.Management said sales for the current quarter will be $3.6 billion, up from a previous estimate of $3.4 billion, with earnings at the high range of between 42-46 cents per share.GLW stock was due to open this morning at $43.44 per share, a market capitalization of $37 billion on expected sales of $12.4 billion. The company will ...

Group 1 - Corning's shares increased by 12% to $43.05, with a higher-than-average trading volume, compared to a 4.1% gain over the past four weeks [1] - The rise in share prices is attributed to bullish preliminary results for Q2 2024, with expected revenues of approximately $3.6 billion, surpassing previous guidance of $3.4 billion [1] - The improved revenue expectations are driven by strong adoption of new optical connectivity products for Generative AI [1] Group 2 - The anticipated earnings per share (EPS) for Corning in the upcoming report is $0.45, unchanged from the same quarter last year, with revenues expected to be $3.41 billion, a decrease of 2.1% year-over-year [2] - The consensus EPS estimate has been revised slightly higher in the last 30 days, indicating a positive trend that may lead to stock price appreciation [2] - Corning currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [3] Group 3 - Corning is part of the Zacks Communication - Components industry, which includes Viav Solutions, whose stock increased by 2.3% to $7.22 but has seen a -4.6% return over the past month [3] - Viav Solutions has an unchanged consensus EPS estimate of $0.07 for the upcoming report, reflecting a -30% change from the previous year [3] - Viav Solutions currently has a Zacks Rank of 4 (Sell), indicating a negative outlook [3]

Corning shares are up more than 12% Monday after the company raised its second-quarter guidance, setting it on track for its best trading day since March 2020.The company, known for developing the Gorilla Glass used for Apple iPhones and other phones, credits the outperformance to demand for its optical connectivity products that power networks that run generative artificial intelligence."We've invented new fibers, new cables, new connectors and new custom integrated optical solutions to dramatically reduce ...

About this content About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup ...

Loading...Loading...Ritholtz Wealth Management’s Josh Brown identified an under-the-radar stock that he believes will play an essential role in the AI, data center buildout story.What Happened: Thursday on CNBC’s “Fast Money Halftime Report,” Brown made the case for buying Corning Inc GLW shares at current levels, suggesting that the stock is being criminally overlooked as an AI play.“You absolutely cannot do GPUs, cannot do data center buildouts without glass,” Brown said. Corning is a materials company fo ...

Core Viewpoint - Investing in quality companies like Corning that have been undervalued due to temporary challenges can provide significant opportunities for value investors as the market often overlooks long-term growth potential [3][4]. Company Overview - Corning has a rich history of over 170 years and is a leader in glass and ceramic science, serving various industries including telecommunications, display technologies, environmental technologies, life sciences, and specialty materials [5]. - The company has faced market discounting over the past year, particularly due to reduced capital spending from telecom customers like AT&T, Verizon, and T-Mobile after extensive investments in 5G networks [5]. Financial Performance - In Q1 2024, Corning's core sales decreased by 3% year-over-year to $3.26 billion, but profitability improved with a gross profit margin increase of 160 basis points to 36.8% [5]. - Management anticipates Q1 to be the lowest revenue quarter of 2024, projecting a sequential sales growth of 4% in Q2 to $3.4 billion [5]. Growth Catalysts - Corning expects to grow annual sales by $3 billion over the next three years with minimal investment, driven by increased spending from telecom carriers and government initiatives like the BEAD program, which allocates $42.5 billion for expanding high-speed internet [5]. - The environmental technologies division is poised for growth due to upcoming EPA standards requiring gasoline vehicles to reduce emissions by 80% by 2031, with filter adoption expected to start as early as 2026 [5]. - The demand for AI datacenter infrastructure is anticipated to boost revenue, as current datacenters will need upgrades to handle AI workloads, significantly increasing the fiber requirements per rack [5]. Financial Health - Corning maintains a strong BBB+ rated balance sheet with a long average debt maturity of 23 years and $1.37 billion in cash, covering $1 billion of debt due in the next five years [5]. - The company offers a 3.0% dividend yield, supported by a 67% payout ratio, and has a history of 13 consecutive years of annual dividend increases with a 5-year CAGR of 8.1% [5]. Valuation Perspective - Corning's current price of $37.26 reflects a forward PE of 19.9, which is considered reasonable given analyst expectations for 10-16% annual EPS growth [5]. - The potential for a PE in the low 20s is supported by the company's role in the AI sector and the significant growth seen in AI-related companies like Nvidia [5]. Investor Outlook - Corning is emerging from a supply-driven business trough with multiple growth catalysts from AI and regulatory requirements, supported by a solid balance sheet and a reasonable valuation, indicating further upside potential [6].

Loading...Loading...On CNBC's “Mad Money Lightning Round,” Jim Cramer said Recursion Pharmaceuticals, Inc. RXRX is a “terrific spec” and he recommended buying the same.On May 9, Recursion Pharmaceuticals reported better-than-expected first-quarter financial results.Corning Incorporated GLW has “not been able to generate the kind of return that I've wanted,” Cramer said. “I would not be a buyer all the way up here.”See Also: Jim Cramer Says This Industrial Stock Is Doing ‘Very Well’; Here’s His Take On Palan ...

```markdown PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Corning Incorporated's unaudited consolidated financial statements for Q1 2024 and 2023 are presented, detailing financial performance, position, and cash flows, with comprehensive accounting notes [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Corning Incorporated reported a 6% decrease in net sales for Q1 2024, but net income increased by 19% to $209 million, with diluted EPS rising to $0.24 Consolidated Statements of Income (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Net sales | $2,975 | $3,178 | (6%) | | Cost of sales | $1,982 | $2,175 | (9%) | | Gross margin | $993 | $1,003 | (1%) | | Operating income | $254 | $297 | (14%) | | Net income attributable to Corning | $209 | $176 | 19% | | Basic EPS | $0.25 | $0.21 | 19% | | Diluted EPS | $0.24 | $0.20 | 20% | [Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) The company shifted from comprehensive income in Q1 2023 to a comprehensive loss of $118 million in Q1 2024, primarily due to foreign currency translation adjustments Consolidated Statements of Comprehensive (Loss) Income (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | | :------------------------------------------------- | :----------------- | :----------------- | | Net income | $225 | $191 | | Foreign currency translation adjustments and other | $(330) | $(84) | | Other comprehensive loss, net of tax | $(327) | $(67) | | Comprehensive (loss) income attributable to Corning Incorporated | $(118) | $109 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $27.6 billion as of March 31, 2024, from $28.5 billion, driven by declines in cash and current assets, while total liabilities also decreased Consolidated Balance Sheets (millions) | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | Change (millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | :---------------- | | Cash and cash equivalents | $1,365 | $1,779 | $(414) | | Total current assets | $6,971 | $7,212 | $(241) | | Total Assets | $27,618 | $28,500 | $(882) | | Total current liabilities | $4,175 | $4,319 | $(144) | | Long-term debt | $7,050 | $7,206 | $(156) | | Total liabilities | $16,059 | $16,632 | $(573) | | Total equity | $11,559 | $11,868 | $(309) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Corning generated $96 million in net cash from operating activities in Q1 2024, a significant improvement from a $49 million use in Q1 2023 Consolidated Statements of Cash Flows (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (millions) | | :---------------------------------------- | :----------------- | :----------------- | :---------------- | | Net cash provided by (used in) operating activities | $96 | $(49) | $145 | | Net cash used in investing activities | $(184) | $(228) | $44 | | Net cash used in financing activities | $(308) | $(248) | $(60) | | Net decrease in cash and cash equivalents | $(414) | $(525) | $111 | [Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity decreased to $11.56 billion at March 31, 2024, influenced by an other comprehensive loss and common dividends paid, partially offset by net income - Net income attributable to Corning Incorporated: **$209 million** (Q1 2024), **$176 million** (Q1 2023)[20](index=20&type=chunk) - Other comprehensive loss: **$(327) million** (Q1 2024), **$(67) million** (Q1 2023)[20](index=20&type=chunk) - Common dividends paid: **$(242) million** (Q1 2024), **$(241) million** (Q1 2023)[20](index=20&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures supporting the consolidated financial statements, covering accounting policies, revenue, taxes, EPS, inventories, liabilities, debt, and segments [Note 1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) The notes clarify the basis of presentation, principles of consolidation, and the use of estimates in financial reporting, mentioning reclassifications with no material impact - Consolidated financial statements include Corning Incorporated and its subsidiaries, prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP")[24](index=24&type=chunk) - Management makes estimates and assumptions that affect reported amounts, and actual results may differ due to inherent uncertainty[25](index=25&type=chunk) - Non-controlling interest represents amounts attributable to minority shareholders of Hemlock Semiconductor Group ("HSG") and other less-than-wholly-owned consolidated subsidiaries[26](index=26&type=chunk) [Note 2. Revenue](index=9&type=section&id=Note%202.%20Revenue) Total revenue decreased by 6% year-over-year, with Telecommunication products seeing the largest decline, while Display and Specialty glass products experienced growth Revenue by Product Category (millions) | Product Category | Q1 2024 (millions) | Q1 2023 (millions) | Change (millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Telecommunication products | $930 | $1,125 | $(195) | (17.3%) | | Display products | $632 | $609 | $23 | 3.8% | | Specialty glass products | $450 | $404 | $46 | 11.4% | | Environmental substrate and filter products | $427 | $407 | $20 | 4.9% | | Life science products | $225 | $247 | $(22) | (8.9%) | | Polycrystalline silicon products | $216 | $277 | $(61) | (22.0%) | | All other products | $95 | $109 | $(14) | (12.8%) | | Total revenue | $2,975 | $3,178 | $(203) | (6.4%) | - Customer deposits decreased to approximately **$1.1 billion** as of March 31, 2024, from **$1.2 billion** as of December 31, 2023. **$80 million** was recognized in Q1 2024, up from **$70 million** in Q1 2023[28](index=28&type=chunk)[29](index=29&type=chunk) - Deferred revenue decreased to approximately **$826 million** as of March 31, 2024, from **$860 million** as of December 31, 2023, primarily related to HSG's long-term supply agreements[31](index=31&type=chunk) [Note 3. Income Taxes](index=10&type=section&id=Note%203.%20Income%20Taxes) The provision for income taxes increased significantly, leading to a higher effective tax rate of 24.0% in Q1 2024 compared to 16.2% in Q1 2023 Income Tax Summary (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (%) | | :------------------------ | :----------------- | :----------------- | :--------- | | Provision for income taxes | $(71) | $(37) | 91.9% | | Effective tax rate | 24.0% | 16.2% | 7.8 ppt | - The effective tax rate in Q1 2024 differed from the U.S. statutory rate of **21%** primarily due to changes in tax reserves, partially offset by a net benefit from foreign derived intangible income[34](index=34&type=chunk) - Corning Precision Materials is appealing certain tax assessments and refund claims in South Korea for tax years 2010-2019, with **$258 million** on deposit as of March 31, 2024[35](index=35&type=chunk) [Note 4. Earnings Per Common Share](index=11&type=section&id=Note%204.%20Earnings%20Per%20Common%20Share) Basic EPS increased to $0.25 and diluted EPS to $0.24 in Q1 2024, reflecting higher net income attributable to Corning Incorporated Earnings Per Common Share Summary | Metric | Q1 2024 | Q1 2023 | Change | | :---------------------------------------- | :------ | :------ | :------- | | Net income attributable to Corning Incorporated (millions) | $209 | $176 | $33 | | Basic earnings per common share | $0.25 | $0.21 | $0.04 | | Diluted earnings per common share | $0.24 | $0.20 | $0.04 | | Weighted-average common shares outstanding – diluted (millions) | 862 | 859 | 3 | [Note 5. Inventories](index=11&type=section&id=Note%205.%20Inventories) Total inventories increased slightly to $2.71 billion at March 31, 2024, from $2.67 billion, with finished goods being the largest component Inventory Composition (millions) | Inventory Component | March 31, 2024 (millions) | December 31, 2023 (millions) | | :------------------------ | :-------------------------- | :-------------------------- | | Finished goods | $1,287 | $1,242 | | Work in process | $555 | $551 | | Raw materials and accessories | $446 | $445 | | Supplies and packing materials | $425 | $428 | | Total Inventories | $2,713 | $2,666 | [Note 6. Other Liabilities](index=12&type=section&id=Note%206.%20Other%20Liabilities) Total other liabilities decreased to $4.44 billion at March 31, 2024, from $4.71 billion, driven by reductions in other current liabilities and customer deposits Other Liabilities (millions) | Liability Type | March 31, 2024 (millions) | December 31, 2023 (millions) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Other accrued liabilities (current) | $2,381 | $2,533 | | Other liabilities (non-current) | $4,435 | $4,709 | | Total Other Liabilities | $6,816 | $7,242 | [Note 7. Debt](index=12&type=section&id=Note%207.%20Debt) The fair value of long-term debt was $6.7 billion at March 31, 2024, compared to a carrying value of $7.1 billion, indicating fair value was lower Debt Fair Value vs. Carrying Value (millions) | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | | :----------------- | :-------------------------- | :-------------------------- | | Fair value of debt | $6,700 | $7,000 | | Carrying value of debt | $7,100 | $7,200 | [Note 8. Employee Retirement Plans](index=12&type=section&id=Note%208.%20Employee%20Retirement%20Plans) Total pension and postretirement benefit expense for Q1 2024 was $22 million, a slight decrease from $24 million in Q1 2023 Pension and Postretirement Benefit Expense (millions) | Component | Q1 2024 (millions) | Q1 2023 (millions) | | :---------------------------------------- | :----------------- | :----------------- | | Total pension and postretirement benefit expense (income) | $22 | $24 | [Note 9. Leases](index=13&type=section&id=Note%209.%20Leases) Corning entered into a synthetic lease for a solar manufacturing facility with an estimated construction cost of $835 million, expected to commence in late 2025 - Corning entered into a synthetic lease for a solar manufacturing facility in Hemlock, Michigan, with an estimated construction cost of approximately **$835 million**[42](index=42&type=chunk) - The lease will commence upon completion of construction, expected in late 2025, with a five-year term and options to renew or purchase[43](index=43&type=chunk) - Estimated undiscounted lease payments, including a residual value guarantee, are approximately **$1.1 billion**[43](index=43&type=chunk) [Note 10. Commitments and Contingencies](index=13&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) Corning is involved in various lawsuits and claims, including environmental matters, with management believing no material adverse effect will occur - Corning settled Dow Corning Chapter 11 Related Matters in January 2024 for an immaterial amount[45](index=45&type=chunk) - A potential liability for Dow Corning Environmental Claims is probable, with an immaterial amount reserved as of March 31, 2024[46](index=46&type=chunk) - Accrued approximately **$86 million** for estimated undiscounted liability for environmental cleanup and related litigation as of March 31, 2024[47](index=47&type=chunk) [Note 11. Financial Instruments](index=14&type=section&id=Note%2011.%20Financial%20Instruments) Corning uses derivative financial instruments for hedging, with total notional amounts increasing to $8.4 billion at March 31, 2024, and translated earnings contracts showing a net gain Derivative Financial Instruments (millions) | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Total derivatives notional amount | $8,406 | $7,271 | | Total derivatives fair value asset | $625 | $631 | | Total derivatives fair value liability | $(184) | $(97) | - Translated earnings contract gain (loss), net: **$39 million** gain in Q1 2024 compared to **$(8) million** loss in Q1 2023[12](index=12&type=chunk)[56](index=56&type=chunk) - Designated **€850 million** of euro-denominated debt as net investment hedges against investments in certain European subsidiaries[57](index=57&type=chunk) [Note 12. Shareholders' Equity](index=16&type=section&id=Note%2012.%20Shareholders%27%20Equity) Corning's Board declared a $0.28 per share common stock dividend, with $3.3 billion remaining under share repurchase authorization, and accumulated other comprehensive loss increased - Common stock dividend of **$0.28 per share** declared on May 2, 2024, payable on June 27, 2024[60](index=60&type=chunk) - **Approximately $3.3 billion** remains available under the 2019 share repurchase authorization; no shares were repurchased in Q1 2024 or Q1 2023[61](index=61&type=chunk)[62](index=62&type=chunk) - Accumulated other comprehensive loss increased primarily due to foreign currency translation adjustments, with a net current-period loss of **$(330) million** in Q1 2024[63](index=63&type=chunk) [Note 13. Share-Based Compensation](index=16&type=section&id=Note%2013.%20Share-Based%20Compensation) Total share-based compensation expense increased to $60 million in Q1 2024, with changes in non-vested time-based and performance-based restricted stock units - Total share-based compensation expense was **$60 million** for Q1 2024, up from **$52 million** for Q1 2023[64](index=64&type=chunk) - Non-vested time-based restricted stock and units decreased to **10,548 thousand shares** as of March 31, 2024, from **13,321 thousand shares** as of December 31, 2023[65](index=65&type=chunk) - Non-vested performance-based restricted stock units increased to **3,351 thousand units** as of March 31, 2024, from **2,026 thousand units** as of December 31, 2023[66](index=66&type=chunk) [Note 14. Reportable Segments](index=18&type=section&id=Note%2014.%20Reportable%20Segments) Corning operates five reportable segments and Hemlock and Emerging Growth Businesses, using constant-currency reporting to mitigate foreign exchange volatility - Corning has five reportable segments: Optical Communications, Display Technologies, Specialty Materials, Environmental Technologies, and Life Sciences[71](index=71&type=chunk) - Hemlock and Emerging Growth Businesses include Hemlock Semiconductor Group (HSG), Pharmaceutical Technologies, Auto Glass Solutions, and the Emerging Innovations Group[68](index=68&type=chunk) Segment Net Sales (millions) | Segment | Q1 2024 Net Sales (millions) | Q1 2023 Net Sales (millions) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Optical Communications | $930 | $1,125 | (17)% | | Display Technologies | $872 | $763 | 14% | | Specialty Materials | $454 | $406 | 12% | | Environmental Technologies | $455 | $431 | 6% | | Life Sciences | $236 | $256 | (8)% | | Hemlock and Emerging Growth Businesses | $311 | $386 | (19)% | Segment Net Income (millions) | Segment | Q1 2024 Net Income (millions) | Q1 2023 Net Income (millions) | Change (%) | | :-------------------------------- | :---------------------------- | :---------------------------- | :--------- | | Optical Communications | $100 | $159 | (37)% | | Display Technologies | $201 | $160 | 26% | | Specialty Materials | $44 | $39 | 13% | | Environmental Technologies | $105 | $82 | 28% | | Life Sciences | $13 | $9 | 44% | | Hemlock and Emerging Growth Businesses | $(10) | $16 | *Not meaningful* | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion of Corning's Q1 2024 financial condition and results, highlighting profitability, cash flow, market conditions, and Q2 2024 sales outlook - Corning made solid progress in 2023 improving profitability and cash flow, and Q1 2024 shows encouraging signs of improving market conditions[79](index=79&type=chunk) - Key industry growth drivers remain intact: wireless, broadband, 5G, cloud computing, advanced AI in Optical Communications; increased screen sizes in Display Technologies; tighter emission regulations in Environmental Technologies; advanced cover materials in Mobile Consumer Electronics[81](index=81&type=chunk) - 2024 Corporate Outlook: Expects core net sales of approximately **$3.4 billion** for the second quarter of 2024[82](index=82&type=chunk) [OVERVIEW](index=21&type=section&id=OVERVIEW) Corning leverages expertise in glass, ceramic, and optical physics to develop category-defining products across diverse markets, aiming for profitable multiyear growth - Corning combines unparalleled expertise in glass science, ceramic science, and optical physics with deep manufacturing and engineering capabilities[77](index=77&type=chunk) - Corning's markets include optical communications, mobile consumer electronics, display, automotive, solar, semiconductor, and life sciences[78](index=78&type=chunk) - The company is well-positioned with existing production capacity and technical capabilities necessary to capture growth and deliver strong incremental profit and cash to shareholders[81](index=81&type=chunk) [RESULTS OF OPERATIONS](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) For Q1 2024, net sales decreased by 6%, but net income attributable to Corning Incorporated increased by 19%, driven by improved translated earnings contract gains and profitability actions Overall Financial Performance (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Net sales | $2,975 | $3,178 | (6%) | | Gross margin | $993 | $1,003 | (1%) | | Gross margin % | 33% | 32% | 1 ppt | | Operating income | $254 | $297 | (14%) | | Income before income taxes | $296 | $228 | 30% | | Net income attributable to Corning Incorporated | $209 | $176 | 19% | [Net sales](index=22&type=section&id=Net%20sales) Net sales decreased by $203 million (6%) in Q1 2024 compared to Q1 2023, primarily due to a $195 million decrease in Optical Communications segment sales - Net sales decreased **$203 million**, or **6%**, for the three months ended March 31, 2024, compared to the same period in 2023[84](index=84&type=chunk) - The decrease was primarily driven by decreased segment sales of **$195 million** in Optical Communications[84](index=84&type=chunk) [Cost of sales / Gross margin](index=23&type=section&id=Cost%20of%20sales%20%2F%20Gross%20margin) Gross margin decreased by $10 million (1%) but improved as a percentage of sales by 1 percentage point to 33% in Q1 2024, driven by profitability actions - Gross margin decreased **$10 million**, or **1%**, but improved as a percentage of sales by **1 percentage point** to **33%** in Q1 2024[83](index=83&type=chunk)[87](index=87&type=chunk) - The improvement in gross margin as a percentage of sales is primarily driven by actions taken throughout 2023 to improve profitability, including raising prices, restoring productivity levels, and normalizing inventory levels[87](index=87&type=chunk) [Selling, general and administrative expenses](index=23&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) Selling, general and administrative expenses increased by $30 million (7%) in Q1 2024, and also increased as a percentage of net sales due to lower sales volume - Selling, general and administrative expenses increased **$30 million** to **$451 million** in Q1 2024[83](index=83&type=chunk)[89](index=89&type=chunk) - Increased as a percentage of net sales from **13%** to **15%** due to lower sales in the current period[83](index=83&type=chunk)[89](index=89&type=chunk) [Research, development and engineering expenses](index=23&type=section&id=Research%2C%20development%20and%20engineering%20expenses) Research, development and engineering expenses increased by $4 million (2%) in Q1 2024, and also increased as a percentage of net sales due to lower sales - Research, development and engineering expenses increased **$4 million** to **$258 million** in Q1 2024[83](index=83&type=chunk)[90](index=90&type=chunk) - Increased as a percentage of net sales from **8%** to **9%** due to lower sales in the current period[83](index=83&type=chunk)[90](index=90&type=chunk) [Translated earnings contract gain (loss), net](index=23&type=section&id=Translated%20earnings%20contract%20gain%20%28loss%29%2C%20net) The company reported a translated earnings contract gain, net, of $39 million in Q1 2024, a significant improvement from an $8 million loss in Q1 2023 - Translated earnings contract gain (loss), net: **$39 million** gain in Q1 2024 compared to **$(8) million** loss in Q1 2023[83](index=83&type=chunk)[92](index=92&type=chunk) - The impact to income for Q1 2024 was primarily driven by unrealized losses from South Korean won-denominated hedges, partially offset by unrealized gains from Japanese yen-denominated hedges[93](index=93&type=chunk) [Income before income taxes](index=24&type=section&id=Income%20before%20income%20taxes) Income before income taxes increased by $68 million (30%) in Q1 2024, primarily driven by a $47 million improvement in translated earnings contract gains - Income before income taxes increased **$68 million** (**30%**) to **$296 million** in Q1 2024 compared to **$228 million** in Q1 2023[83](index=83&type=chunk)[95](index=95&type=chunk) - The increase was primarily driven by a **$47 million** improvement in translated earnings contract gains[95](index=95&type=chunk) [Provision for Income Taxes](index=24&type=section&id=Provision%20for%20Income%20Taxes) The provision for income taxes increased by $34 million (92%) in Q1 2024, resulting in an effective tax rate of 24% compared to 16% in Q1 2023 - Provision for income taxes increased **$34 million** to **$(71) million** in Q1 2024 compared to **$(37) million** in Q1 2023[83](index=83&type=chunk)[96](index=96&type=chunk) - The effective tax rate increased to **24%** in Q1 2024 from **16%** in Q1 2023, primarily due to differences arising from foreign earnings and changes in tax reserves[83](index=83&type=chunk)[97](index=97&type=chunk) [Net income attributable to Corning Incorporated](index=24&type=section&id=Net%20income%20attributable%20to%20Corning%20Incorporated) Net income attributable to Corning Incorporated increased by $33 million (19%) to $209 million in Q1 2024, with diluted EPS rising to $0.24 Net income attributable to Corning Incorporated (millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--------------------------------- | :------ | :------ | :------- | | Net income attributable to Corning Incorporated (millions) | $209 | $176 | $33 | | Basic earnings per common share | $0.25 | $0.21 | $0.04 | | Diluted earnings per common share | $0.24 | $0.20 | $0.04 | [Comprehensive (loss) income attributable to Corning Incorporated](index=24&type=section&id=Comprehensive%20%28loss%29%20income%20attributable%20to%20Corning%20Incorporated) Comprehensive (loss) income shifted from an income of $109 million in Q1 2023 to a loss of $118 million in Q1 2024, due to increased foreign currency translation adjustments - Comprehensive (loss) income attributable to Corning Incorporated was **$(118) million** for Q1 2024, compared to **$109 million** for Q1 2023[99](index=99&type=chunk) - This movement is driven by the increase in net losses on foreign currency translation adjustments of **$246 million**, primarily from the Japanese yen, Chinese yuan, and euro[99](index=99&type=chunk) [SEGMENT ANALYSIS](index=25&type=section&id=SEGMENT%20ANALYSIS) Overall segment net sales and net income decreased by 3% in Q1 2024, with declines in Optical Communications and Hemlock, while Display, Specialty, and Environmental showed growth Net sales of reportable segments and Hemlock and Emerging Growth Businesses (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (%) | | :------------------------------------------------------- | :----------------- | :----------------- | :--------- | | Net sales of reportable segments and Hemlock and Emerging Growth Businesses | $3,258 | $3,367 | (3)% | | Net income of reportable segments and Hemlock and Emerging Growth Businesses | $453 | $465 | (3)% | [Optical Communications](index=25&type=section&id=Optical%20Communications) Segment net sales decreased by 17% and net income by 37% in Q1 2024, primarily due to lower sales volume driven by reduced carrier demand and inventory drawdowns - Segment net sales decreased **17%** to **$930 million** in Q1 2024 from **$1,125 million** in Q1 2023[101](index=101&type=chunk) - Segment net income decreased **37%** to **$100 million** in Q1 2024 from **$159 million** in Q1 2023[108](index=108&type=chunk) - The decrease was primarily driven by a decline in sales volume due to lower carrier demand as customers continue to draw down inventory[102](index=102&type=chunk)[109](index=109&type=chunk) [Display Technologies](index=25&type=section&id=Display%20Technologies) Segment net sales increased by 14% and net income by 26% in Q1 2024, driven by higher sales volume from increased panel maker utilization and pricing actions - Segment net sales increased **14%** to **$872 million** in Q1 2024 from **$763 million** in Q1 2023[101](index=101&type=chunk) - Segment net income increased **26%** to **$201 million** in Q1 2024 from **$160 million** in Q1 2023[108](index=108&type=chunk) - The increase was primarily due to higher sales volume, attributable to increased panel maker utilization driven by growth in retail demand, as well as pricing actions[103](index=103&type=chunk)[110](index=110&type=chunk) [Specialty Materials](index=25&type=section&id=Specialty%20Materials) Segment net sales increased by 12% and net income by 13% in Q1 2024, reflecting strong demand for premium smartphone cover materials and semiconductor-related products - Segment net sales increased **12%** to **$454 million** in Q1 2024 from **$406 million** in Q1 2023[101](index=101&type=chunk) - Segment net income increased **13%** to **$44 million** in Q1 2024 from **$39 million** in Q1 2023[108](index=108&type=chunk) - The increase in segment net sales was due to continued strong demand for premium smartphone cover materials as well as semiconductor-related products[104](index=104&type=chunk)[111](index=111&type=chunk) [Environmental Technologies](index=25&type=section&id=Environmental%20Technologies) Segment net sales increased by 6% and net income by 28% in Q1 2024, primarily due to increased gasoline particulate filter adoption in China and improved operating performance - Segment net sales increased **6%** to **$455 million** in Q1 2024 from **$431 million** in Q1 2023[101](index=101&type=chunk) - Segment net income increased **28%** to **$105 million** in Q1 2024 from **$82 million** in Q1 2023[108](index=108&type=chunk) - The increase in segment net sales was primarily due to increased gasoline particulate filter adoption in China, partially offset by a decline in heavy-duty diesel[105](index=105&type=chunk) - The increase in segment net income was primarily driven by the increase in sales and improved operating performance[112](index=112&type=chunk) [Life Sciences](index=25&type=section&id=Life%20Sciences) Segment net sales decreased by 8% in Q1 2024 due to continued customer inventory drawdowns in North America and Europe, but net income increased by 44% due to profitability improvements from productivity actions - Segment net sales decreased **8%** to **$236 million** in Q1 2024 from **$256 million** in Q1 2023[101](index=101&type=chunk) - Segment net income increased **44%** to **$13 million** in Q1 2024 from **$9 million** in Q1 2023[108](index=108&type=chunk) - The decrease in segment net sales was primarily due to customers in North America and Europe continuing their inventory drawdowns[106](index=106&type=chunk) - The increase in segment net income was primarily driven by profitability improvements from productivity actions taken[113](index=113&type=chunk) [Hemlock and Emerging Growth Businesses](index=25&type=section&id=Hemlock%20and%20Emerging%20Growth%20Businesses) Segment net sales decreased by 19% and net income shifted to a loss of $10 million in Q1 2024, due to lower polysilicon pricing and reduced Pharmaceutical Technologies sales - Segment net sales decreased **19%** to **$311 million** in Q1 2024 from **$386 million** in Q1 2023[101](index=101&type=chunk) - Segment net income shifted to a loss of **$(10) million** in Q1 2024 from an income of **$16 million** in Q1 2023[108](index=108&type=chunk) - The decrease in segment net sales was primarily due to a decrease in the HSG business driven by lower pricing for solar-grade polysilicon and lower sales in Pharmaceutical Technologies from the completion of volume commitments for COVID-related products[107](index=107&type=chunk)[114](index=114&type=chunk) [CORE PERFORMANCE MEASURES](index=27&type=section&id=CORE%20PERFORMANCE%20MEASURES) Corning uses non-GAAP core performance measures to evaluate financial performance, excluding items like foreign currency impacts and acquisition costs, with core net sales and income decreasing in Q1 2024 - Core performance measures exclude the impact of translating Japanese yen-denominated debt, translated earnings contracts, acquisition-related costs, certain discrete tax items, restructuring, litigation, pension mark-to-market adjustments, and other non-recurring items[116](index=116&type=chunk) - Management utilizes constant-currency reporting for segments to exclude the impact of currency fluctuations, aligning rates with hedging instruments[117](index=117&type=chunk)[118](index=118&type=chunk) [Results of Operations – Core Performance Measures](index=27&type=section&id=Results%20of%20Operations%20%E2%80%93%20Core%20Performance%20Measures) Core net sales decreased by 3% to $3.3 billion, and core net income decreased by 6% to $330 million in Q1 2024, primarily due to declines in Optical Communications and Hemlock Core Performance Measures | Metric | Q1 2024 | Q1 2023 | Change (%) | | :------------------ | :------ | :------ | :--------- | | Core net sales (millions) | $3,258 | $3,367 | (3)% | | Core net income (millions) | $330 | $350 | (6)% | | Core earnings per share | $0.38 | $0.41 | (7)% | - The decrease in core net sales was primarily driven by decreased segment sales in Optical Communications and Hemlock and Emerging Growth Businesses, partially offset by increased sales in Display and Specialty Materials[121](index=121&type=chunk) - The decrease in core net income was primarily due to lower segment net income for Optical Communications, partially offset by higher segment net income for Display Technologies[122](index=122&type=chunk) [Reconciliation of Non-GAAP Measures](index=29&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides a detailed reconciliation of GAAP financial measures to their non-GAAP core counterparts, illustrating adjustments for constant-currency, translated earnings contracts, and other items Reconciliation of GAAP to Core Measures (millions) | Metric | GAAP Q1 2024 | Core Q1 2024 | GAAP Q1 2023 | Core Q1 2023 | | :--------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net sales (millions) | $2,975 | $3,258 | $3,178 | $3,367 | | Income before income taxes (millions) | $296 | $436 | $228 | $461 | | Net income attributable to Corning Incorporated (millions) | $209 | $330 | $176 | $350 | | Per share | $0.24 | $0.38 | $0.20 | $0.41 | | Effective tax rate | 24.0% | 20.2% | 16.2% | 19.4% | [Items Adjusted from GAAP Measures](index=30&type=section&id=Items%20Adjusted%20from%20GAAP%20Measures) This section defines specific adjustments made to GAAP measures to derive core performance measures, including constant-currency, translated earnings contracts, and acquisition-related costs - Constant-currency adjustment accounts for the impact of translating foreign currencies into U.S. dollars, primarily related to Japanese yen exposure[130](index=130&type=chunk) - Translated earnings contract adjustment reflects the impact of realized and unrealized gains and losses from foreign currency hedges related to translated earnings[132](index=132&type=chunk) - Acquisition-related costs include intangible amortization, inventory valuation adjustments, and external acquisition-related deal costs[132](index=132&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Corning maintains a strong financial condition and liquidity, expecting to fund operations through operating cash flow, existing cash, and debt issuances, with stable total debt - Major funding sources for 2024 and beyond include operating cash flow, existing cash and cash equivalents, and proceeds from any issuances of debt[134](index=134&type=chunk) - The company is not aware of any known trends, demands, commitments, events, or uncertainties that will result in a material decrease in liquidity[133](index=133&type=chunk) [Key Balance Sheet Data](index=31&type=section&id=Key%20Balance%20Sheet%20Data) Working capital decreased slightly to $2.8 billion at March 31, 2024, with a stable current ratio of 1.7:1, while total debt was $7.37 billion Key Balance Sheet Data (millions) | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Working capital | $2,796 | $2,893 | | Current ratio | 1.7:1 | 1.7:1 | | Trade accounts receivable, net | $1,621 | $1,572 | | Days sales outstanding | 49 | 47 | | Inventories | $2,713 | $2,666 | | Inventory turns | 3.1 | 3.2 | | Days payable outstanding | 55 | 52 | | Long-term debt | $7,050 | $7,206 | | Total debt | $7,368 | $7,526 | | Total debt to total capital | 39% | 39% | - Accelerated the collection of **$380 million** of accounts receivable during Q1 2024 through accounts receivable management programs[138](index=138&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) Net cash provided by operating activities significantly improved to $96 million in Q1 2024, driven by working capital improvements, while investing cash use decreased and financing cash use increased Consolidated Statements of Cash Flows (millions) | Metric | Q1 2024 (millions) | Q1 2023 (millions) | Change (millions) | | :---------------------------------------- | :----------------- | :----------------- | :---------------- | | Net cash provided by (used in) operating activities | $96 | $(49) | $145 | | Net cash used in investing activities | $(184) | $(228) | $44 | | Net cash used in financing activities | $(308) | $(248) | $(60) | - Net cash provided by operating activities increased **$145 million** primarily driven by improvements in working capital[139](index=139&type=chunk) - Net cash used in investing activities improved by **$44 million** due to lower capital expenditures (**$130 million**) and higher realized gains on translated earnings contracts (**$13 million**), partially offset by **$67 million** in proceeds from equipment sale in the prior period[140](index=140&type=chunk) - Net cash used in financing activities increased by **$60 million** primarily driven by **$54 million** in proceeds received in the prior year from other financing arrangements[141](index=141&type=chunk) [Sources of Liquidity](index=32&type=section&id=Sources%20of%20Liquidity) As of March 31, 2024, Corning had $1.4 billion in cash, with 62% held outside the U.S., and access to a $1.5 billion revolving credit facility - Cash and cash equivalents totaled **$1,365 million** as of March 31, 2024, with approximately **62%** held outside the U.S[142](index=142&type=chunk)[143](index=143&type=chunk) - Available credit capacity includes a **$1.5 billion** U.S. dollar revolving credit facility (no outstanding amounts) and **$105 million** in unused Chinese yuan facilities[142](index=142&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk) - The company has a commercial paper program up to **$1.5 billion**, with no outstanding commercial paper as of March 31, 2024[145](index=145&type=chunk) - Leverage (debt to capital ratio) was approximately **39%** as of March 31, 2024, well within the maximum **60%** covenant[147](index=147&type=chunk) [Uses of Cash](index=33&type=section&id=Uses%20of%20Cash) Corning's uses of cash include common stock dividends and capital expenditures, with $3.3 billion remaining under share repurchase authorization and no repurchases in Q1 2024 - Corning's Board of Directors declared a **$0.28 per share** common stock dividend on May 2, 2024[154](index=154&type=chunk) - **Approximately $3.3 billion** remains available under the 2019 share repurchase authorization; no shares were repurchased in Q1 2024[153](index=153&type=chunk) - Capital expenditures were **$0.3 billion** for Q1 2024, and full-year 2024 capital expenditures are expected to be lower than 2023[155](index=155&type=chunk) - Samsung Display Co., Ltd. (SDC) has an option to sell an additional **22 million** common shares to Corning between 2024 and 2027, with the remaining **58 million** shares subject to a lock-up period expiring in 2027[155](index=155&type=chunk) [Defined Benefit Pension Plans](index=34&type=section&id=Defined%20Benefit%20Pension%20Plans) Global pension plans were 81% funded as of December 31, 2023, with the U.S. qualified plan being 92% funded, and $11 million in cash contributions anticipated for international plans in 2024 - Corning's global pension plans were **81%** funded as of December 31, 2023[157](index=157&type=chunk) - The U.S. qualified plan, representing **77%** of the consolidated defined benefit pension plans' projected benefit obligation, was **92%** funded as of December 31, 2023[157](index=157&type=chunk) - The Company anticipates making cash contributions of **$11 million** to its international pension plans during 2024[158](index=158&type=chunk) [Commitments, Contingencies and Guarantees](index=34&type=section&id=Commitments%2C%20Contingencies%20and%20Guarantees) Corning entered into a synthetic lease for a solar manufacturing facility with an estimated construction cost of $835 million, with no other material changes to commitments or contingencies - Corning entered into a synthetic lease for a solar manufacturing facility in Hemlock, Michigan, with an estimated construction cost of approximately **$835 million**[159](index=159&type=chunk) - The lease, expected to commence in late 2025, has a five-year term with estimated undiscounted lease payments of approximately **$1.1 billion**[160](index=160&type=chunk) - No material changes outside the ordinary course of business in the obligations disclosed in the 2023 Form 10-K[161](index=161&type=chunk) [Off Balance Sheet Arrangements](index=34&type=section&id=Off%20Balance%20Sheet%20Arrangements) There were no material changes to off-balance sheet arrangements compared to those disclosed in the 2023 Form 10-K - No material changes outside the ordinary course of business in off balance sheet arrangements as disclosed in the 2023 Form 10-K[161](index=161&type=chunk) [ENVIRONMENT](index=34&type=section&id=ENVIRONMENT) For environmental information, the report refers to Item 1. Legal Proceedings and Note 10 (Commitments and Contingencies) in the financial statements - Refer to Item 1. Legal Proceedings or Note 10 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements for environmental information[161](index=161&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=34&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) There were no material changes in the company's critical accounting estimates or assumptions since the most recent Annual Report on Form 10-K - There were no material changes in the Company's critical accounting estimates or assumptions since the date of the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2023[162](index=162&type=chunk) [FORWARD-LOOKING STATEMENTS](index=35&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements about future operating performance and growth, emphasizing that actual results could differ materially due to various risks and uncertainties - Forward-looking statements relate to future operating performance, market share, revenue and earnings growth rates, ability to innovate and commercialize new products, expected capital expenditure, and implementation of cost-reduction initiatives[163](index=163&type=chunk) - Actual results could differ materially from forecasted statements due to various risks, uncertainties, and other factors, including global economic trends, market volatility, supply chain disruptions, and competition[164](index=164&type=chunk)[165](index=165&type=chunk) - The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, except as required by applicable securities laws[164](index=164&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Corning is exposed to foreign currency exchange rate movements and their impact on earnings and foreign

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, helping investors identify stocks with high potential for market outperformance [2] Zacks Style Scores Overview - The Zacks Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each assessing different investment characteristics [2][3][4] - Value Score focuses on identifying undervalued stocks using financial ratios [2] - Growth Score evaluates a company's future growth potential based on earnings and sales projections [3] - Momentum Score identifies trends in stock price movements to optimize entry points for investments [3] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [4] Zacks Rank and Style Scores Interaction - The Zacks Rank utilizes earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [5] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal investment potential [6] Company Spotlight: Corning Incorporated (GLW) - Corning, established in 1936, specializes in advanced glass technologies across various markets and operates under six segments [7] - Currently rated 3 (Hold) by Zacks, Corning has a VGM Score of B and a Momentum Style Score of A, with a recent 2.7% increase in share price over the past month [7] - Analysts have raised earnings estimates for Corning, with the Zacks Consensus Estimate for fiscal 2024 now at $1.87 per share, reflecting a positive outlook [7]

Financial Data and Key Metrics Changes - Sales for Q1 2024 were nearly $3.3 billion, with EPS at $0.38, reflecting a year-over-year gross margin increase of 160 basis points to 36.8% [5][19] - Free cash flow improved by $300 million compared to the previous year [5][19] - Net income for the quarter was $100 million, down 37% year-over-year due to lower volume [20] Business Line Data and Key Metrics Changes - **Optical Communications**: Sales were $930 million, down 17% year-over-year, primarily due to lower carrier demand as customers drew down inventory [19][20] - **Display Technologies**: Sales increased to $872 million, up 14% year-over-year, with net income rising 26% to $201 million, driven by higher volume and pricing actions [21][22] - **Specialty Materials**: Sales were $454 million, up 12% year-over-year, driven by strong demand for premium smartphone cover materials [25] - **Environmental Technologies**: Sales were $455 million, up 6% year-over-year, driven by increased GPF adoption in China [25] - **Life Sciences**: Sales were $236 million, down 8% year-over-year, as customers continued to draw down inventory [26] Market Data and Key Metrics Changes - The retail glass market is expected to see mid-single-digit percent growth in glass volume compared to 2023, with flat television unit volume and growth in screen sizes [9][22] - The company anticipates a recovery in PC demand, contributing to overall growth in the display segment [9][22] Company Strategy and Development Direction - The company aims to add more than $3 billion in annualized sales within the next three years, leveraging existing capacity and capabilities [6][10] - Focus on innovation in Optical Communications, particularly in fiber technology, to capture growth opportunities in broadband, 5G, cloud computing, and AI [10][20] - The company is also pursuing growth in automotive and mobile consumer electronics by increasing content per device [13][14] Management's Comments on Operating Environment and Future Outlook - Management expects Q1 2024 to be the lowest quarter of the year, with improvements anticipated in subsequent quarters [5][17] - There are encouraging signs of improving market conditions, particularly in Optical and Display segments [5][17] - The company is confident in its ability to generate strong incremental profits and cash flow as markets improve [17][19] Other Important Information - The company has a strong balance sheet with one of the longest debt tenors in the S&P 500, and plans to maintain a strong cash flow while providing returns to shareholders [28][29] - The company is actively managing currency hedges to mitigate earnings volatility, particularly concerning the Japanese yen [23][24] Q&A Session Summary Question: Timing of AI datacenter orders and revenue - Management indicated that revenue growth from AI datacenter orders is expected to build momentum in the back half of the year as orders are fulfilled [30][31] Question: Impact of BEAD timing on Optical business - Management expects BEAD funding approvals to begin late this year, with spending anticipated in 2025 [38][39] Question: Display market profitability and hedging costs - Management stated that they aim to maintain appropriate profitability levels in the display business, factoring in the costs of hedging [67]