Materials Science Co. Posts Strong Sales Gains in All 5 of its Business Segments

Source: Streetwise Reports   01/26/2022

Corning Inc. shares traded 11% higher after the company reported Q4/21 and FY/21 financial results highlighting a 23% YoY increase in core sales.

Innovative materials science technology company Corning Inc. (GLW:NYSE), today announced Q4/21 and FY/21 financial results for the period ended December 31, 2021. In addition, the firm offered some forward guidance for both Q1/22 and FY/22.

The company’s Chairman and CEO Wendell P. Weeks led off the report by commenting, “Corning delivered another strong quarter of year-over-year growth. For FY/21, we exceeded $14 billion in sales and $2 in EPS. We nearly doubled free cash flow, increased our dividend by 9%, and reduced outstanding shares by 5% through the resumption of share repurchases. By leveraging our core capabilities and ‘More Corning’ strategy, we are capturing a compelling set of short- and long-term opportunities across our portfolio.”

“We achieved double-digit ROIC and expanded our operating margin by 230 basis points; however, our gross margin is not where it should be. We are focused on expanding gross margin and expect improvement in 2022 as sales grow and our price actions take hold throughout the year,” CEO Weeks added

Corning reported that in Q4/21 core sales grew by 12% to $3.68 billion, compared to $3.35 billion in Q4/20.

For FY/21, the company posted GAAP and core sales totaling $14.08 billion, which represents a 23% increase over the $11.30 billion registered during FY/20. The firm stated that the year-over-year increases were attributed to revenue gains from its Optical Communications, Display, Life Sciences and Hemlock Semiconductor Group.

Corning reported that GAAP EPS in Q4/21 and FY21 was $0.56 and $1.28, respectively.

The company stated that its gross margin in Q4/21 fell by 180 basis points to 36.5%. The firm advised that this was largely attributable to lower-than-average automotive production, seasonally lower specialty materials sales and some effects from inflation.

Corning advised that looking ahead to Q1/22, it expects that display glass prices will be in line with Q4/21. The company said that “the supply-demand balance for display glass is tight and that in 2022, management expects overall glass supply to remain tight to balanced and the pricing environment to remain favorable.”

The company provided some forward guidance and stated that for Q1/22 it estimates that core sales will be in the range of $3.5-3.7 billion and added that in Q1/22 it expects EPS of $0.48-0.53.

For FY/22 the firm said it expects total sales of about $15 billion and noted that it anticipates that it will improve its margins and profit on a percentage basis as it plans to keep capital expenditures at 2021 levels.

Corning Inc.’s EVP and CFO Tony Tripeny remarked, “in 2021, we grew significantly year over year, with all segments adding sales and four out of five logging double-digit percentage increases…Since 2019, we have grown sales by 21% and EPS by 18%.”

Tripeny continued, “As we discussed throughout 2021, freight, logistics, and raw material costs along with lower automotive sales due to chip shortages impacted our margins. Over the last several months, we negotiated with our customers to increase prices in our contracts to share increased costs more appropriately. The revised pricing terms take effect throughout 2022, and we expect gross margin to expand accordingly.”

Corning noted that it maintains a leadership position in every market covered by its five Market-Access Platforms. The firm stated that its Optical Communications sales grew 22% y-o-y to $4.3 billion, spurred by increased spending by its customers for broadband, 5G and cloud computing.

Similarly, in FY/21, the company’s Life Sciences division delivered all-time-high sales of over $1.2 billion increasing by 24% y-o-y. The company advised that the Life Sciences segment benefited directly from strong demand to support the global pandemic response, research labs and continued growth in bioproduction.

In addition, despite weakness in the automotive market surrounding chip shortages, sales in the company’s Automotive segment rose 16% in FY/21 to a new all-time high of $1.6 billion.

Corning Inc. is a New York-based materials science technology and innovation company. The firm boasts “its unparalleled expertise in glass science, ceramic science and optical physics along with its deep manufacturing and engineering capabilities.” The company offers its products to a variety of markets including automotive, display, life sciences, mobile consumer electronics and optical communications.

Corning started the day with a market cap of around $30.1 billion with approximately 853.4 million shares outstanding. GLW shares opened 15% higher today at $40.60 (+$5.30, +15.01%) over yesterday’s $35.30 closing price. The stock has traded today between $38.91 and $41.12 per share and closed for trading at $39.24 (+$3.94, +11.16%).

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