Investment Rating - The report recommends a "First-time Buy" rating for the industry [5] Core Viewpoints - The domestic glass substrate industry is experiencing a significant shift towards localization, with major breakthroughs in high-generation glass substrate technology by domestic companies [8] - The global market for FPD glass substrates is expected to reach approximately 50 billion RMB by 2025, driven by price increases and rising demand [3][44] - The competitive landscape is dominated by three major foreign companies, which hold about 80% of the market share, but domestic manufacturers are rapidly increasing their market presence [4][51] Summary by Sections 1. Display Glass Substrate Overview - Display glass substrates are a core component of display panels, accounting for approximately 15.2% of the cost of TFT-LCD panels [2][27] - The demand for glass substrates is primarily driven by the LCD panel industry, with about 80% of glass substrates used for LCD panels [2][27] 2. Development of Display Glass Substrates - Major glass substrate manufacturers, including Corning, AGC, and NEG, have raised prices by over 10% in response to rising energy costs [3][43] - The global market for FPD glass substrates is projected to grow by 15%, from 6.12 billion USD in 2024 to 7.05 billion USD in 2025, equivalent to about 50 billion RMB [3][44] 3. Competitive Landscape - The top three companies (Corning, AGC, and NEG) control approximately 80% of the FPD glass substrate market, with Corning leading at over 50% market share [4][51] - Domestic manufacturers have made significant progress in high-generation glass substrate technology, with companies like Rainbow Technology achieving notable production milestones [8][19] 4. Investment Recommendations - Given the clear trend towards domestic production of high-generation glass substrates, companies like Rainbow Technology are recommended for investment due to their technological and market potential [8][9]

Group 1 - Apple announced a plan to invest $600 billion in the U.S. over the next four years to encourage global suppliers to shift key component production to the U.S. [1] - As part of this initiative, Apple will invest $2.5 billion in Corning to produce all iPhone and Apple Watch cover glass in Harrodsburg, Kentucky, marking the first time that cover glass for these products will be 100% made in the U.S. [1][3] - Corning is building the world's largest and most advanced smartphone glass production line at the Harrodsburg facility, which will be exclusively dedicated to Apple, resulting in a 50% increase in manufacturing and engineering jobs in Kentucky [3] Group 2 - Apple and Corning have been collaborating since 2007, with Corning developing and manufacturing cover glass for the first iPhone at the Harrodsburg plant [3] - The Ceramic Shield glass produced at the Harrodsburg facility is claimed to be the strongest smartphone glass currently available, a result of years of close collaboration between Apple and Corning [3] - Since establishing the Advanced Manufacturing Fund in 2017, Apple has invested nearly $500 million in Corning's operations in Kentucky and has spent billions on domestic glass procurement in the U.S. [3]

Group 1 - Apple announced an increase in its investment in U.S. manufacturing to $600 billion, adding an additional $100 billion to its earlier commitment of $500 billion over four years [1] - CEO Tim Cook expressed pride in the announcement and highlighted the launch of the new American Manufacturing Plan (AMP), which will involve partnerships with 10 domestic companies [1][3] - The AMP aims to bring advanced manufacturing to the U.S., with partners including Corning, Applied Materials, Texas Instruments, and others [3] Group 2 - Apple plans to allocate $2.5 billion of the AMP funds to expand its collaboration with Corning, focusing on creating the largest and most advanced smartphone-level production line in the world [3] - The production line will be established at Corning's factory in Kentucky, with the goal of achieving 100% U.S. manufacturing for the glass screens of iPhones and Apple Watches [3] - Apple and Corning will also establish an "Apple-Corning Innovation Center" to focus on advanced materials and next-generation manufacturing platforms [3]

Investments & Partnerships - Apple is investing $25 billion to expand the Corning facility in Kentucky, aiming for 100% of the glass used in iPhones and Apple Watches to be produced there [1][2] - Apple continues existing deals with suppliers like Coherent, Global Wafers America, Global Foundry, Samsung, Broadcom, and Texas Instruments [3][4] - Broadcom is developing and building cellular components for 5G and wireless connectivity in the United States [5] Production & Manufacturing - Construction is underway for the Houston factory, announced with a $500 billion investment, to produce AI servers for Apple Intelligence, expected to be fully operational in 2026 [4] - Apple has shifted a significant portion of its production meant for the US to India to benefit from lower tariff rates outside of China, with the goal of fulfilling US demand [6][7] - Work on AI servers, previously done overseas, will now be conducted in Texas starting next year [9][10] Trade & Tariff - Apple is receiving tariff relief, specifically an exemption from the doubling of India tariffs [5][6]

展望第三季度，管理层预计"Springboard"计划将继续推动卓越表现，核心销售额将实现两位数同比增 长，达到42亿美元，收益增速将再次快于销售额增速，核心每股收益预计在0.63美元至0.67美元之间。 康宁公司董事会主席兼首席执行官魏文德表示："我们在第二季度取得了卓越业绩，核心销售额同比增 长12%，达到40.5亿美元，核心每股收益的增速更是超过核心销售额增长率的两倍，达到0.60美元。整 体来看，关键的长期结构性趋势以及我们的'More Corning'战略推动了市场对康宁解决方案的需求，我 们得以持续实现升级版'Springboard'计划所设定的强劲盈利增长目标。" 中化新网讯 近日，康宁公司公布2025年第二季度财务业绩。其第二季度业绩超出预期：核心销售额同 比增长12%，核心运营利润率扩大160个基点，核心每股收益同比增长28%，调整后的自由现金流同比 增长28%。这一业绩得益于市场对生成式人工智能新产品的持续强劲需求，公司光通信企业业务销售额 同比增长81%。 ...

Investment Rating - The investment rating for the industry is "Positive" and is maintained [6]. Core Insights - Corning's optical communication business has shown strong growth, driven by both enterprise and carrier networks, with enterprise network revenue increasing by 81% year-on-year due to AI data center construction [2][9]. - The commercialization of data center interconnect (DCI) solutions has begun, with expectations to grow into a $1 billion business in the coming years [2][9]. - The "scale-up" trend is advancing, with the OIO optical interconnect solution expected to unlock 2-3 times the growth potential in the enterprise network market [2][9]. - The demand for multimode fiber is robust, with profitability exceeding that of single-mode fiber [2][9]. Summary by Sections Financial Performance - In Q2 2025, Corning reported GAAP sales revenue of $3.86 billion, a year-on-year increase of 19%, and a net profit of $470 million, up 351% year-on-year. On a core (non-GAAP) basis, sales revenue was $4.05 billion, a 12% increase year-on-year, with a net profit of $520 million, up 29% year-on-year [4][9]. Business Segments - The optical communication business generated $1.57 billion in revenue, a 41% year-on-year increase, with a net profit of $250 million, reflecting a 73% year-on-year increase [9]. - The enterprise network segment achieved $769 million in revenue, marking an 81% year-on-year growth, while the carrier network segment generated $797 million, a 16% year-on-year increase [9]. Market Trends - The current growth in enterprise networks is primarily driven by "scale-out" deployments, while future growth opportunities are expected to arise from "scale-up" scenarios, which involve deploying more GPUs within a single node [9]. - The transition to OIO solutions is anticipated to significantly enhance data center interconnect architectures, potentially expanding the current $2 billion enterprise network market [9]. Investment Recommendations - The report suggests focusing on companies with a high proportion of data communication business, such as Longi Fiber, FiberHome, and others involved in fiber optic cables, connectors, and OIO optical engines [2][9].

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents Corning's unaudited consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Corning's unaudited consolidated financial statements, offering a foundational view of financial performance and position [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section presents Corning's consolidated statements of income, detailing key revenue and profitability metrics | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $3,862 | $3,251 | $7,314 | $6,226 | | Gross margin | $1,392 | $949 | $2,606 | $1,942 | | Operating income | $573 | $186 | $1,018 | $440 | | Net income attributable to Corning Incorporated | $469 | $104 | $626 | $313 | | Diluted EPS | $0.54 | $0.12 | $0.72 | $0.36 | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section outlines Corning's consolidated statements of comprehensive income (loss), detailing net income and other comprehensive items | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $500 | $122 | $685 | $347 | | Other comprehensive income (loss), net of tax | $426 | $(217) | $609 | $(544) | | Comprehensive income (loss) attributable to Corning Incorporated | $895 | $(113) | $1,235 | $(231) | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This section presents Corning's consolidated balance sheets, detailing assets, liabilities, and equity at specific reporting dates | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Total Assets | $28,745 | $27,735 | | Total Liabilities | $17,200 | $16,665 | | Total Equity | $11,545 | $11,070 | - Total Assets increased by **$1,010 million (3.6%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in property, plant and equipment, and inventories[15](index=15&type=chunk) - Total Liabilities increased by **$535 million (3.2%)** over the same period, with current portion of long-term debt and accounts payable seeing notable increases[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Corning's consolidated statements of cash flows, detailing cash movements from operating, investing, and financing activities | Metric (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $859 | $617 | | Net cash used in investing activities | $(466) | $(338) | | Net cash used in financing activities | $(696) | $(612) | | Net decrease in cash and cash equivalents | $(277) | $(360) | | Cash and cash equivalents at end of period | $1,491 | $1,419 | - Net cash provided by operating activities increased by **$242 million (39.2%)** for the six months ended June 30, 2025, compared to the same period in 2024[17](index=17&type=chunk) - Net cash used in investing activities increased by **$128 million (37.9%)** for the six months ended June 30, 2025, primarily due to higher capital expenditures and lower realized gains on translated earnings contracts[17](index=17&type=chunk) [Consolidated Statements of Changes in Shareholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This section presents Corning's consolidated statements of changes in shareholders' equity, detailing movements in equity components | Metric (in millions) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :------------------- | :------------------------- | :-------------------------- | | Total Corning Incorporated shareholders' equity | $10,686 | $11,116 | | Non-controlling interest | $384 | $429 | | Total equity | $11,070 | $11,545 | - Total Corning Incorporated shareholders' equity increased by **$430 million** from December 31, 2024, to June 30, 2025, driven by net income and other comprehensive income, partially offset by common dividends and treasury stock purchases[20](index=20&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to Corning's consolidated financial statements, offering additional context and disclosures [1. Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines Corning's significant accounting policies, including GAAP conformity and management's estimates - The consolidated financial statements are prepared in conformity with GAAP and include wholly-owned subsidiaries and entities where Corning is the primary beneficiary. Management makes estimates and assumptions that affect reported amounts[24](index=24&type=chunk)[25](index=25&type=chunk) - Certain prior year amounts have been reclassified to conform to current year presentation, including segment disclosures, with no impact on financial results[28](index=28&type=chunk) [2. Restructuring, Impairment and Other Charges and Credits](index=11&type=section&id=2.%20Restructuring%2C%20Impairment%20and%20Other%20Charges%20and%20Credits) This section details restructuring, impairment, and other charges and credits, including asset write-offs from plant closures - No material restructuring, impairment, and other charges or credits were recorded for the three and six months ended June 30, 2025[29](index=29&type=chunk) - For the three and six months ended June 30, 2024, the Company recorded **$138 million** and **$129 million**, respectively, in such charges, primarily due to asset write-offs from a display manufacturing plant closure[30](index=30&type=chunk) [3. Revenue](index=12&type=section&id=3.%20Revenue) This section provides a detailed breakdown of Corning's revenue by product category and related deferred revenue | Product Category (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Optical communications products | $1,566 | $1,113 | $2,921 | $2,043 | | Display products | $725 | $704 | $1,429 | $1,336 | | Specialty materials products | $542 | $497 | $1,037 | $947 | | Automotive products | $457 | $452 | $883 | $915 | | Life sciences products | $246 | $237 | $474 | $462 | | Polycrystalline silicon products | $223 | $199 | $429 | $415 | | All other products | $103 | $49 | $141 | $108 | | Total revenue | $3,862 | $3,251 | $7,314 | $6,226 | - Customer deposits were approximately **$1.1 billion** as of June 30, 2025, mostly non-refundable and securing rights to products under long-term supply agreements[32](index=32&type=chunk) - Deferred revenue was approximately **$763 million** as of June 30, 2025, primarily from HSG's long-term supply agreements[35](index=35&type=chunk) [4. Income Taxes](index=13&type=section&id=4.%20Income%20Taxes) This section details Corning's income tax provision and effective tax rates, including impacts from foreign income and new legislation | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $(84) | $(50) | $(139) | $(121) | | Effective tax rate | 14.4% | 29.1% | 16.9% | 25.9% | - The effective tax rate for Q2 2025 was **14.4%**, lower than the U.S. statutory rate of **21%**, mainly due to foreign derived intangible income, share-based compensation adjustments, and non-taxable items[38](index=38&type=chunk) - The Company is evaluating the potential impact of the newly enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements, which includes tax law changes like **100% bonus depreciation** and immediate R&D expensing[41](index=41&type=chunk) [5. Earnings Per Common Share](index=13&type=section&id=5.%20Earnings%20Per%20Common%20Share) This section presents Corning's basic and diluted earnings per common share, reflecting net income attributable to the company | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to Corning Incorporated | $469 | $104 | $626 | $313 | | Basic EPS | $0.55 | $0.12 | $0.73 | $0.37 | | Diluted EPS | $0.54 | $0.12 | $0.72 | $0.36 | - Diluted EPS significantly increased to **$0.54** for the three months ended June 30, 2025, from **$0.12** in the prior year, reflecting higher net income[42](index=42&type=chunk) [6. Acquisition](index=15&type=section&id=6.%20Acquisition) This section details Corning's acquisition of a U.S. solar module manufacturing facility and related goodwill - In April 2025, Corning acquired a U.S. solar module manufacturing facility for **$278 million**, including **$17 million** cash, **$111 million** in notes payable, and **$150 million** in contingent consideration[44](index=44&type=chunk) - The acquisition resulted in **$98 million** of goodwill, reflecting expected synergies and expanded market opportunities from vertical integration into solar module business[46](index=46&type=chunk) [7. Inventories](index=15&type=section&id=7.%20Inventories) This section provides a breakdown of Corning's inventories by category and highlights changes over the period | Inventory Category (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Finished goods | $1,479 | $1,323 | | Work in process | $550 | $547 | | Raw materials and accessories | $564 | $413 | | Supplies and packing materials | $491 | $441 | | Total Inventories | $3,084 | $2,724 | - Total inventories increased by **$360 million (13.2%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in finished goods and raw materials[48](index=48&type=chunk) [8. Other Liabilities](index=16&type=section&id=8.%20Other%20Liabilities) This section details Corning's current and non-current other liabilities, explaining key changes and contributing factors | Liability Category (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Total Other Accrued Liabilities (Current) | $2,758 | $3,121 | | Total Other Liabilities (Non-current) | $4,709 | $4,525 | - Current other accrued liabilities decreased by **$363 million**, mainly due to lower wages and employee benefits and derivative instruments, partially offset by higher dividend payable[49](index=49&type=chunk) - Non-current other liabilities increased by **$184 million**, primarily driven by higher defined benefit pension plan liabilities and long-term operating leases, and the addition of contingent consideration[49](index=49&type=chunk) [9. Debt](index=16&type=section&id=9.%20Debt) This section outlines Corning's debt structure, including fair value, repayments, new borrowings, and credit facilities - The fair value of long-term debt was **$6.3 billion** as of June 30, 2025, compared to a carrying value of **$6.7 billion**[50](index=50&type=chunk) - During the six months ended June 30, 2025, the Company repaid **$209 million** of Chinese yuan-denominated loans and incurred **$285 million** in new borrowings under similar facilities[52](index=52&type=chunk) - A new **$1.5 billion** unsecured multi-currency line of credit was entered into on July 28, 2025, replacing the existing credit agreement and expiring in July 2030[53](index=53&type=chunk) [10. Employee Retirement Plans](index=18&type=section&id=10.%20Employee%20Retirement%20Plans) This section details Corning's pension and postretirement benefit expenses for the reporting periods | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total pension benefit expense (income) | $25 | $28 | $47 | $50 | | Total postretirement benefit expense (income) | $(5) | $(3) | $(8) | $(4) | [11. Leases](index=18&type=section&id=11.%20Leases) This section describes Corning's lease agreements, including new production equipment leases and amendments to existing facilities - Corning entered into a new lease for production equipment in Q1 2025, valued at approximately **$261 million** (undiscounted), expected to commence late 2026 with a 16-year term[58](index=58&type=chunk) - An existing equipment lease for a solar manufacturing facility was amended in May 2025, increasing the estimated purchase and installation cost to **$586 million**, with estimated undiscounted lease payments of approximately **$680 million**[59](index=59&type=chunk)[60](index=60&type=chunk) [12. Commitments and Contingencies](index=19&type=section&id=12.%20Commitments%20and%20Contingencies) This section addresses Corning's legal commitments and contingencies, including lawsuits and environmental cleanup liabilities - Corning is a defendant in various lawsuits and subject to claims in the normal course of business, with management believing the ultimate disposition will not materially adversely affect financial position, liquidity, or results of operations[61](index=61&type=chunk) - The Company has accrued approximately **$92 million** as of June 30, 2025, for estimated undiscounted liability for environmental cleanup and related litigation[63](index=63&type=chunk) [13. Financial Instruments](index=20&type=section&id=13.%20Financial%20Instruments) This section details Corning's use of financial instruments, including derivatives for managing foreign exchange and interest rate risks | Derivative Type (in millions) | Notional Amount (June 30, 2025) | Fair Value Asset (June 30, 2025) | Fair Value Liability (June 30, 2025) | | :---------------------------- | :------------------------------ | :------------------------------- | :----------------------------------- | | Total derivatives | $17,897 | $861 | $(436) | - The total gross notional amount for translated earnings contracts increased to **$12,331 million** as of June 30, 2025, from **$9,817 million** as of December 31, 2024[69](index=69&type=chunk) - Corning uses cross currency swap contracts to economically lock in unrealized foreign exchange gains on Japanese yen-denominated debt, receiving **$24 million** in net payments during the six months ended June 30, 2025[74](index=74&type=chunk) [14. Shareholders' Equity](index=24&type=section&id=14.%20Shareholders%27%20Equity) This section details Corning's shareholders' equity, including dividends, share repurchases, and comprehensive income adjustments - Corning's Board of Directors declared quarterly dividends of **$0.28 per share** for Q1 and Q2 2025, with the Q2 dividend payable in September 2025[80](index=80&type=chunk) - Approximately **$3.0 billion** remains available under the Company's 2019 share repurchase authorization as of June 30, 2025[84](index=84&type=chunk) - The change in accumulated other comprehensive loss for the three and six months ended June 30, 2025, was primarily related to foreign currency translation adjustments, resulting in a gain of **$391 million** and **$552 million**, respectively[86](index=86&type=chunk) [15. Share-Based Compensation](index=27&type=section&id=15.%20Share-Based%20Compensation) This section details Corning's share-based compensation expense and the status of outstanding stock options | Metric (in millions) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :------------------- | :------------------------------- | :----------------------------- | | Total share-based compensation expense | $63 | $117 | | Income tax benefit | $9 | $17 | - As of June 30, 2025, **3.7 million** stock options were outstanding, vested, and exercisable, with a weighted-average exercise price of **$24.36** and an aggregate intrinsic value of **$104 million**[90](index=90&type=chunk) [16. Reportable Segments](index=28&type=section&id=16.%20Reportable%20Segments) This section outlines Corning's reportable segments, including recent reorganizations and financial performance by segment - As of January 1, 2025, Corning reorganized its segments, combining Automotive Glass Solutions and Environmental Technologies into the new Automotive segment, and renaming Display Technologies to Display[91](index=91&type=chunk) | Segment Net Sales (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Optical Communications | $1,566 | $1,113 | $2,921 | $2,043 | | Display | $898 | $1,014 | $1,803 | $1,886 | | Specialty Materials | $545 | $501 | $1,046 | $955 | | Automotive | $460 | $479 | $900 | $970 | | Life Sciences | $250 | $249 | $484 | $485 | | Hemlock and Emerging Growth Businesses | $326 | $248 | $570 | $523 | | Segment Net Income (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Optical Communications | $247 | $143 | $448 | $243 | | Display | $243 | $258 | $486 | $459 | | Specialty Materials | $81 | $63 | $155 | $107 | | Automotive | $79 | $71 | $147 | $149 | | Life Sciences | $18 | $17 | $31 | $30 | | Hemlock and Emerging Growth Businesses | $(10) | $3 | $(26) | $20 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Corning's financial condition, results of operations, liquidity, and capital resources - Corning expects core net sales of approximately **$4.2 billion** for the third quarter of 2025[111](index=111&type=chunk) [OVERVIEW](index=34&type=section&id=OVERVIEW) This section provides an overview of Corning's business, highlighting its core expertise and diverse market applications - Corning leverages expertise in glass science, ceramic science, and optical physics to develop category-defining products across diverse markets including optical communications, mobile consumer electronics, display, automotive, solar, semiconductor, and life sciences[109](index=109&type=chunk)[110](index=110&type=chunk) [RESULTS OF OPERATIONS](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes Corning's financial results, focusing on net sales, gross margin, and operating income trends | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % change (25 vs 24) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % change (25 vs 24) | | :------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Net sales | $3,862 | $3,251 | 19% | $7,314 | $6,226 | 17% | | Gross margin | $1,392 | $949 | 47% | $2,606 | $1,942 | 34% | | Gross margin % | 36% | 29% | 7 pp | 36% | 31% | 5 pp | | Operating income | $573 | $186 | 208% | $1,018 | $440 | 131% | | Income before income taxes | $584 | $172 | 240% | $824 | $468 | 76% | - Net sales increased by **19%** for the three months and **17%** for the six months ended June 30, 2025, primarily driven by strong growth in optical communication products[114](index=114&type=chunk)[115](index=115&type=chunk) - Gross margin percentage improved by **7 percentage points (QoQ)** and **5 percentage points (YoY)** due to management actions like price increases, productivity improvements, and inventory normalization[117](index=117&type=chunk)[118](index=118&type=chunk) [SEGMENT ANALYSIS](index=39&type=section&id=SEGMENT%20ANALYSIS) This section provides a detailed analysis of Corning's financial performance across its various reportable segments - Optical Communications segment net sales increased by **41% (QoQ)** and **43% (YoY)**, driven by strong demand for Generative AI products in Enterprise and datacenter interconnects/fiber-to-the-home in Carrier business[136](index=136&type=chunk)[137](index=137&type=chunk) - Display segment net sales decreased by **11% (QoQ)** and **4% (YoY)** due to lower sales volume from reduced panel maker utilization, partially offset by pricing actions[136](index=136&type=chunk)[138](index=138&type=chunk) - Hemlock and Emerging Growth Businesses saw increased sales due to higher demand in HSG and Pharmaceutical Technologies, but net income decreased due to temporarily higher costs for new solar product ramp-up[142](index=142&type=chunk)[150](index=150&type=chunk) [CORE PERFORMANCE MEASURES](index=42&type=section&id=CORE%20PERFORMANCE%20MEASURES) This section presents Corning's core performance measures, excluding non-recurring items and foreign exchange volatility for clearer insights - Core performance measures exclude non-recurring items, foreign exchange volatility, and items unrelated to continuing operations to provide a clearer view of core operating performance[151](index=151&type=chunk)[153](index=153&type=chunk) | Core Metric (in millions, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % change (25 vs 24) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % change (25 vs 24) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Core net sales | $4,045 | $3,604 | 12% | $7,724 | $6,862 | 13% | | Core net income | $523 | $407 | 29% | $990 | $737 | 34% | | Core earnings per share | $0.60 | $0.47 | 28% | $1.14 | $0.85 | 34% | - Core net sales increased by **12% (QoQ)** and **13% (YoY)**, primarily driven by Optical Communications and Specialty Materials[157](index=157&type=chunk)[158](index=158&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=50&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses Corning's financial liquidity and capital resources, including cash flow, debt, and capital expenditures - Corning maintains a strong financial condition and liquidity, with major funding sources including operating cash flow, existing cash balances, and potential debt issuances[177](index=177&type=chunk)[178](index=178&type=chunk) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Working capital | $2,721 | $3,073 | | Current ratio | 1.5:1 | 1.6:1 | | Total debt | $7,500 | $7,211 | | Total debt to total capital | 39% | 39% | - Net cash provided by operating activities improved to **$859 million** for the six months ended June 30, 2025, compared to **$617 million** in the prior year, driven by higher net income[183](index=183&type=chunk) - Capital expenditures for the six months ended June 30, 2025, were **$516 million**, with full-year 2025 capital expenditures expected to be approximately **$1.3 billion**[203](index=203&type=chunk) [ENVIRONMENT](index=55&type=section&id=ENVIRONMENT) This section refers to environmental matters discussed in the notes to the consolidated financial statements - Information regarding environmental matters is referenced to Note 12 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements[209](index=209&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=55&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms no material changes in Corning's critical accounting estimates since the last Annual Report on Form 10-K - There were no material changes in the Company's critical accounting estimates or assumptions since the most recent Annual Report on Form 10-K[210](index=210&type=chunk) [FORWARD-LOOKING STATEMENTS](index=56&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights forward-looking statements in the report and potential risks that could cause actual results to differ - The report contains forward-looking statements regarding future events, operating performance, market share, growth rates, innovation, capital expenditures, and cost-reduction initiatives[212](index=212&type=chunk) - Actual results could differ materially from forecasts due to various risks and uncertainties, including global economic trends, market volatility, supply chain disruptions, competition, and regulatory changes[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses Corning's exposure to market risks, primarily foreign currency exchange rate movements - Corning is exposed to foreign currency exchange rate movements that impact earnings from financial instruments and transactions, and affect the conversion of net assets and income of foreign subsidiaries[215](index=215&type=chunk)[218](index=218&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Corning's disclosure controls and procedures and reports no material changes in internal control - Corning's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[216](index=216&type=chunk) - There were no material changes in Corning's internal control over financial reporting during the period covered by the report[217](index=217&type=chunk) [PART II – OTHER INFORMATION](index=58&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section states Corning is involved in various lawsuits and claims, not expected to materially affect financial position or operations - Corning is a defendant in various lawsuits and claims, but management believes the ultimate disposition will not materially adversely affect the company's financial position, liquidity, or results of operations[220](index=220&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the 2024 Form 10-K for a comprehensive discussion of risk factors impacting Corning's business - Readers should consider risk factors discussed in Corning's 2024 Form 10-K, as these could materially impact the Company's business, financial condition, or future results[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock purchases by the issuer during Q2 2025, including shares for employee awards and repurchases | Period | Total number of shares purchased | Average price paid per share | | :--------------- | :------------------------------- | :--------------------------- | | April 1-30, 2025 | 837,482 | $42.14 | | May 1-31, 2025 | 273,565 | $48.04 | | June 1-30, 2025 | 521,596 | $50.53 | | Total | 1,632,643 | $45.81 | - The total number of shares purchased includes **671,297 shares** under the 2019 Repurchase Program, alongside shares related to employee stock awards and options[222](index=222&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section states no Section 16 reporting persons adopted, modified, or terminated Rule 10b5-1(c) trading arrangements during Q2 2025 - No Section 16 reporting persons adopted, modified, or terminated any Rule 10b5-1(c) trading arrangements during the three months ended June 30, 2025[224](index=224&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - The exhibits include certifications from the CEO and CFO (31.1, 31.2, 32) and various Inline XBRL taxonomy documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[225](index=225&type=chunk) [Signatures](index=60&type=section&id=Signatures) This section contains the signature of Corning Incorporated's authorized representative, confirming the report's due submission - The report was signed by Stefan Becker, Senior Vice President and Corporate Controller, on behalf of Corning Incorporated on August 1, 2025[227](index=227&type=chunk)

Core Viewpoint - Corning Inc. reported record high core sales and core earnings per share for Q2 2025, indicating strong performance and growth potential in the market [2][3]. Financial Performance - Core sales increased by 12% year-over-year [3] - Core operating margin expanded by 160 basis points [3] - Core earnings per share grew by 28% year-over-year [3] - Adjusted free cash flow rose by 28% year-over-year [3] Business Segments - The optical communications segment saw an 81% year-over-year increase in sales, driven by strong demand for generative AI products [3]. Future Outlook - Management anticipates continued strong performance in Q3, with core sales expected to achieve double-digit year-over-year growth, reaching $4.2 billion [3]. - Core earnings per share are projected to be between $0.63 and $0.67 [3].

Group 1 - Corning's Q2 2025 performance highlights the high prosperity of the optical communication industry, with revenue and net profit growth rates of 41% and 73% respectively, driven by increased overseas AI computing demand [1] - The overall revenue for Q2 2025 reached $4.05 billion, a 12% year-on-year increase, with the optical communication business contributing $1.57 billion, marking a 41% growth [1] - The Springboard strategy initiated in 2023 is showing initial results, aiming to increase sales scale and operating profit margin to 20% by the end of 2026 [2] Group 2 - The "Scale-up" strategy is becoming a key driver for expanding the optical communication industry, with enterprise network sales surging 81% year-on-year due to AI node capability upgrade demands [2] - The new business scale related to the Scale-up strategy is expected to reach 2-3 times the current $2 billion size, potentially exceeding a market size of $6 billion [2] - The optical communication industry is experiencing a dual dividend period driven by AI and technological breakthroughs, with Corning's performance providing confidence and direction for technological iteration and collaborative innovation in the industry [3]

Shares of Corning, a specialized glass maker for smartphones and AI data centers, popped Tuesday as the company’s second-quarter results exceeded expectations. https://t.co/1RWdUO7xP8 ...