Corning reports strong earnings for quarter, year
Wednesday, January 25, 2017
Corning Inc. reported substantially improved fourth-quarter and annual earnings, attributing the results to a focus on the company's core operations.
Traders reacted favorably to the report, lifting Corning stock by 6 percent, $1.41, on Tuesday to $26.18, just shy of its 52-week high, at the close of trading.
Net income in the fourth quarter was $1.57 billion, $1.47 a share, on revenues of $2.5 billion. A bulk of the profit gain, however, came from the "realignment' in its Dow Corning Inc. investment. For the same period a year ago, the company reported net earnings of $224 million, 17 cents a share, on revenues of $2.23 billion.
For the full year, Corning reported net income of $3.7 billion, $3.23 a share, on revenues of $9.4 billion, up from net income of $1.3 billion, $1 per share, on sales of $9.1 billion.
"Corning delivered outstanding fourth-quarter results, continuing the momentum that began earlier in the year," said Wendell P. Weeks, chairman, chief executive officer and president.
To remove the effects of extraordinary items such as currency conversion and the Dow Corning realignment, Corning also reports "core" earnings, which gives a more accurate picture of the company's financial performance. Fourth quarter core earnings were $534 million, 50 cents a share, on sales of $2.55 billion compared to net income of $429 million, 34 cents a share on revenues of $2.4 billion. For the full year, core earnings were $1.77 billion, $1.55 a share, on sales of $9.7 billion. compared with net income of $1.88 billion, $1.40 a share, on sales of $9.8 billion in 2015.
Core earnings of 50 cents a share in the fourth quarter beat analysts expectations of 44 cents for the quarter.
During the year, Corning repurchased 22 percent of its outstanding shares and increased its quarterly dividend by 12 percent. Corning executives said it is their intention to provide another dividend bump this year.
"We`re particularly pleased to see our market-access platforms continue to evolve as we anticipated," Weeks said. "Progress on our initiatives include the rapid adoption rate of Gorilla Glass 5; new platform wins from major OEMs for gas particulate filters; and customer commitments that support long-term growth opportunities in Optical Communication."
During a conference call with analysts on Tuesday morning, Corning executives sounded an upbeat tone on virtually all business segments, adding that the adoption of Gorilla Glass in the automotive market presents the company with unique growth opportunities. Corning's screen product dominates virtually all handheld categories, but the the key to expanding that market is too find other potential applications, with an eye directed toward the auto market.