GLW - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Corning, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. now Ann hand Investor Nicholson, would your conference Relations. I today, speaker Vice Instructions] like the to to [Operator President of Please ma’am go ahead

Ann Nicholson

quarter and With within President Officer. contain These differ remarks could of forward-looking and uncertainties today’s XXXX Executive the that in Weeks, Executive fall Officer; Reform XXXX. meaning you, good results materially. Vice Private that of Executive and and you detailed and Officer; are Chief to statements the Litigation Securities Thank to I’d remind Vice factors and cause actual Tripeny, President Evenson, that morning Chairman and the financial statements Strategy earnings company’s Financial risks, like today These me Corning’s other call. Act factors Tony are Chief involve reports. to Wendell Chief welcome four Jeff

be note core GAAP our also data. we performance that unless should comments we measures, using You our indicate specifically will consolidated results to relate discussing

are measures by performance management core business. the non-GAAP Our analyze to used measures

though fourth contracts. adjustments, and current contracts accounting the associated results at between the are our which be charges, well even largest quarter, to respect currency mark-to-market noncash, in difference will core of current end as in foreign restructuring requires from company's hedging and the not noncash primarily mark-to-market stem settled quarter. value hedge these with earnings as future translation, contracts quarter, GAAP GAAP each recorded settling be losses debt With periods to at the mark-to-market and the For

cash has be GAAP no QX clear, accounting mark-to-market million. flow. reduced $XX in To this us, earnings For impact on our this by

shareholder cash certainty earnings economically fluctuations distributions. exchange us rate to future growth and foreign and provide ability for higher Our our for our invest currency and hedges protect our flow, from

the program rate years pleased in Investor with reconciliation or value under core since underlying corning.com. our core to contracts hedging five We're our results Relations ago. additional a A We've provides. our the economics very more than transactions. found GAAP of provide section certainty using with billion $X.X aligned at of it website of in economic the non-GAAP received constant comparable cash hedge by and into can results be their transparency operations inception currency the our Our

may Wendell. and being the our our You shown results Analyst also core on website. you with webcast, website call encourage you I'll financials access the them our download and on slides can Supporting to from turn follow downloadable And over we along, are live to in Center. Interactive now

Wendell Weeks

Ann, you, year. outstanding and segments morning, we Today, profits sales strategic our good our and initiatives. an everyone. progress Thank continue and reported finish Each we the year-over-year, to grew to of

sales fourth year-over-year. $X.X were and quarter, For billion, XX% the sequentially XX% up

goes It and and people. focused without XXXX our the Throughout unrest. rest difficult world priorities social We the the in year. saying, we joined confront on our sheet. uncertainty the protecting on economic cash XX.X%. an income billion to we balance XX% year-over-year year-over-year. generated XXX Our the points operating Operating finished year-over-year. XX% XX% quarter, margin $XXX and of expanded free with sequentially full of to $X.XX flow million for fourth year EPS $XXX in and was We cash million the XX% up year, the on pandemic, year, was while customers strategic basis and $X.X grew our incredibly of sequentially executed

share three observations. our For more performance, perspective I'll on

of and our rapidly we to ability face in adapt remain First, the demonstrated resilient uncertainty.

contribute. we we and our are, Corning make end to growth with and have our content markets; a outperformed strategy embracing against difficult to difference, Second, contributed what period, we're this to throughout clearly the finally, our more opportunity wherever

observation. I'll Now on first expand my

our financial many share capital Our in continued expenditures the cost, Corning Like that production on capabilities pausing reducing and reducing leadership companies, distinctive. in have resulted buybacks. strength, make bolstering levels and decisive inventory, strong and actions carefully we operational operating execution managing focused

but what what about we not it's we However, kept. cut,

adjusted when capacity, production, improved. demand we we While didn't reduce to meet keeping positioned economy the us increasing

and to across investments our strategic capture programs our innovations major make playing to platforms. develop our out to our growth customers talent advance the with market we And continue capabilities. and protect preserve We multifaceted access

started Our adjusted first as in started we to of second cost serve. of our the markets many generated as half year. we significant operations shoots, the signs actions savings keeping And green effectively the showing economy half of pace in the demand recover

the Our tell story. results

impacted very were while in strong over Our growing growth in related we But income generating free year-over-year by returning half, and the improved second sales down lockdowns. XX% sales flow. XXX%, as cash operating were the pandemic economies XX% first, most half first the the

year, billion flow, almost we cash our sheet and remains $X balance strong. the of For very generated free

We expect this continue into heading strong momentum XXXX. to

as focus will have is execution on We adapt continue to working. our we and proven that approach

Corning important that customers' Turning challenges just an qualified value powerful the integrate all continue is address, year, offer In market Corning to creation new our trends my opportunities difficult to this into have especially to and we this observation. content new serve, that products. second industries uniquely letter. is we to In more proven

and markets. We grew to of buying trends. are $XXX At We're collaborating up XX% Materials, I'll immersive one I described and Platform. Corning that off major solutions in help In paid in fourth Market-Access the investing sales are Automakers Specialty in more year-over-year, strategy buying. industry uniquely aren't we our quarter, year-over-year industry auto content large, innovations relying Corning significantly car Consumer Mobile of and opportunity range disruptions. focus for end revenue The the OEMS, as we're opportunities. every And move into the more on safer people the with us, in address to with content. Electronics, their Technologies people suited already these our more designing both how sales offering create is year-over-year, forward. Automotive XX% to and Environmental Today, products this Last the stuff. per at featuring putting top is we're We're while cleaner exclusively were more quarter, outperforming our the undergoing experiences. looking up that technology capture on We're additional vehicles, streams provides businesses.

look of biggest business. Let's Starting momentum. our successes building Glass right strong with our Solutions at We're now. Automotive two

adoption enabling and the lower Our XD the shift collaborating very advantaged rapid solutions our We're and LGE, ColdForm to in-vehicle Visteon, are BOE, ecosystem, Via technology, towards accelerate industry are displays which that across including integrated auto interiors. cost, patented are that leaders shaped. interactive, shaped Optronics enables the of with auto

strong continue China, operational auto fully Hefei, of now in servicing demand. to our technology by adoption our facility see large-scale and growing OEMS. is And Our we

our cleanest of grown new customer advanced year-over-year. ahead opportunity regulations. with develop started product, with business. we China in proof said to platforms technology billion business has to our of can sales majority Gorilla GPS on When ion is Europe year challenge. most are car way efficiently our effectively reduce global display, four content schedule, Glass with GPF, gasoline continue Our our point nearly continues and increased $X.X date. which filters manufacturing still to wide. in automakers shut the we today, to Hyperscreen innovations, vehicles our we're for our trap buy. new addressing win per a our And X And to with of recent introduced emissions, regulations, particulates. by it capabilities dashboard three temporarily actually pandemic Mercedes-Benz We're that well science produce Environmental the down these We emissions helping a Demand ceramic new we in particulate fine Like opportunity the production, quickly. Technologies, grew features pollution market and some Similarly, and cover applied building the content OEM filter our you awarded our gasoline when of grow. meet the We're a times. a proprietary feet expertise extrusion particular rapidly leading to and harmful

of expect introduced soon new our emissions. recently GPS, respond GPS with we other story playing to key zero improving models Corning We required on car featuring near will to get to many capabilities. response, we even as a more be in similar automakers In see filtration China the enhanced we for next-generation models Across challenges markets, migrate next solutions. launching as to out regions beyond content Europe regulations. our upcoming and quality. as industry technology particulate air And wave closer focus They're prepare our

currently At agreement provide to building Let Glass Glass demand the of related a me long-term a market vials some a portion towards drug other in share year, has significant highlighted access supply the marketed industry. XXXX. franchise start pandemic entered Pfizer our in across Life accomplishments achieved platforms. milestones we the major for Valor Valor products. Sciences, strength the And of we our In

supplying the vaccine domestic We for of are vials. millions as treatments U.S. the supporting We from expand as funding diagnostic is recognized from used several to capacity capacity COVID We're in million substantially development our fight Glass the well received Valor demand million in driving their which BioNTech $XXX government awarded COVID domestic contribution Valor enough testing. government million vaccine XXX strong Sciences the Life were than produce global Valor we're expand multiple our health segment, products. recently for tips, robotic shipped consumable successful our manufacturing we vaccines, COVID leading developers. to pipette for after, doses, $XX Soon vaccine and for manufacturers. more U.S. mass vials supporting efforts. for testing to In to of Today, development.

noted ready, collaborating delivery power indoor Qualcomm working And with that In cost also dramatically our that the deployed sites. new architecture. are Technologies We that XG yet, XX% Consumer and small-cell as of We're indoor is manufacturing EnerSys Mobile can up requirements. XG-ready wave featured We're sales simplify terminals in X%. and customers. returned year-over-year the innovative and six electrical Apple outdoor Ceramic featuring solutions ceramic, to we easy-to-install up location, we're compact we and quarter that of Operators Verizon customers latest installation per In conceivable wireless any Shield. deliver Samsung actually partnered deployments front I a speed be growth lowering help already continue fiber networks this enable toughness. the to affordable. smartphone to XG with toughest enterprise to $XXX in for glass launched increase deployment. support growth bandwidth speeding connectivity their develop and save featured launched also the of expect Specialty iPhone. Electronics. and devices. declined on Glass were the Victus. the Corning four. we for scale up We Gorilla transparent Materials market invented durability XX% to They on to cover which the in Communications, and up to Optical world's color-free of first it's unparallel offers Corning Turning XG. And to can to and also to It full collaborating easy-to-install growing spending XXXX, deployment that terminal were introduced with millimeter solutions, year

TV with newest XX.X large-sized made pandemic. capture on XX.X Turning IT Gen of than its to TVs which well to strong. production and remain feat efficiently XX% Corning in XX.X China, to facilities a are continues customer Display. year. that more meet TVs grow. are were two Gen products Demand full the Retail midst in most small including the Ramping up for XX-inch for the has is Guangzhou, sets positioned Large been for Gen to plants. growth demand these plants sites no now and demand. expanding in Wuhan

host engineering tanks teams a We facilities. to are very expert rose that our proud dedicated both unprecedented start-up to of and in of innovative challenges

We've technologies long-term content consumer crisis. tends challenges And in observation. true of moment the And accelerate the the lifestyles combat continue values that are And opportunities light. aftermath address bring help keeping to people to society pandemic. creating could be safe living our ahead, life-changing we and our some the to we're evident actions. At third unleased help strong in that to the leads my our are Looking markets. each contribute that to through proud Corning, growth the change capabilities virus. of to of carrier trends our to secular health and as kind drivers of Corning's believe We're in

racial priorities. I these services emergency is recognize, in quality also around delivering results important launched that in across support our Unity that and XXXX. Corning We've fronts, outstanding opportunity year we with and the executing on in the social conclusion, progress vital we communities well. we range our solid resources world. strategic confident and momentum all important and leadership expect the entering making to We're our grow In am Campaign We are human on and to relief unprecedented times, have and programs, a share of issues.

More in counting that as cars, We're our development. networks And grow. how we consumers industries buying Corning expand outperformance vaccine to to across TVs or bear excited to life I'm will about and Our support strategy continue on optical to and just serve. smartphones more and the drive bringing their diverse vital not capabilities operators we're continue sciences, drug we

Now, he insight I'll that the can so turn call provide to results on and over Tony, our expectations. additional

Tony Tripeny

Wendell, about a basis, our grew feel Thank On we year-over-year good you, good and everyone. results. quarter earnings. sales We morning, and fourth

We to More first expect we by grow Corning again for our to grow full year, improving quarter, expect strategy. in the the and markets driven and

to a We results sustainable company to stronger building bigger, in ability market while delivers are our agile respond that remaining changing factors.

XX% year-over-year quarter In fourth $X.X the let we walk sales exceeding and XX% grew billion, quarter, fourth through Now expectations. sequentially to you performance. me our

sales and year-over-year Semiconductor, Optical with Materials delivered Environmental particularly growth, we XX% up Specialty to continue. growth, Communications sales expect grew year-over-year, income. returned both and markets. Hemlock outperforming respectively, their of growing consolidation the that to net segment XX% year-over-year and XX%, growth strong sales underlying every Technologies Excluding and

in million financial We full quarter. flow balance an free for a billion. We year cash was year the year-over-year. and was EPS $XXX an flow year-over-year a on XXXX million. operating the We income sequentially $X.XX was We sequentially margin entered XXX $XXX XX% of basis basis. with $X.X XX.X%. of points generated operating of That ended improvement free XX% up in cash and cash Our of the position. excellent Cumulative grew XX% XX% year-over-year. is

net full let's million. $X.X the the quarter sequentially were in XX% And segments. products million, for income during TV X% million, sequentially season sales review sales demand and XX% $XXX $XXX Retail and up promotional X% Display strong $XXX year-over-year. Display’s net was Now In billion, remained income fourth Technologies, IT were year-over-year. business QX. was and strong remain up year and

volume plant. Our expected, also resulting market mid-single tight, drew and panel XXXX. utilizations the due full retail glass robust our the These a outage makers of and power at more in were price digits. high digits being year second year. at ran recently dynamics resulted satisfy The The industry for inventory in competitor's tight the demand. glass being XXXX glass Panel to to down declines more was the were mid-single market half shortage and in up industry in supply for glass than supply a

let's at look Now XXXX.

IT and We size XX.X, markets are TV will manufacturing. large size retail most expect TV and remain gen to with for confident the growth We that which strong. remain we to the that TVs large continue Gen is grow, capture to efficient well-positioned

expect mid in the We a XXXX. grow to market percentage single-digit glass

tight supply glass quarters. to expect remain We the in upcoming

environment. of result supply/demand a a these favorable dynamics, are pricing we As experiencing very

a be other expect in the decade. flat We any quarters. the environment XXXX following factors than prices increase. see sizes seen significantly actually QX, to the customers pricing This may We with Glass sequential over XXXX. glass some the last continue for to three QX, drive the declines first will is gen we've favorable better upcoming quarter some for prices sequential in believe

million, In tight; supply these to maintain prices Optical First, continue we continue at third, acceptable existing levels; and glass periodic quarter in expect must on display profitability $XXX our second, fourth glass investments. pricing to up to X% Glass were to year-over-year manufacturing returns capacity face challenges investments support requires sales competitors operations. sequentially. and current be Communications, X%

income performance. was to and driven improvement can for core of Fourth year-over-year sequentially. up $XXX carrier by enterprise XX% broad both and Our quarter XXX% improvements in growth be incremental favorable demand the was volume, million The and cost customers. year-over-year, attributed net

investments growth higher positive continue. demand Communications, to networks. returned growth Optical from optical Bandwidth are users to increasing and expect connections. seeing have that we increasing is We their customers and statements in demanding performance We're in on

Our up, ready sales capture we're and order materializes. are it and picking rates as to demand

Communications the We for in are Optical sales grow we year. confident will

fourth sales market of million, year. evaluate and and to – you we'll keep monitor improve the updated signals as we in China. $XXX to determine Environmental as were the to additional keep go Technologies, successful XX% driven continue XX%, operational year-over-year and continue quarter up We continue In we'll demand through up growth, ahead GPF to XX% sequentially, sequentially, million, adoptions was by capacity in performance of strong China. ramping GPF $XX and and expectations markets income year-over-year and continued Net globally of magnitude XX%

the was the underlying billion, market. $XXX was full $X.X our performance For income better year, than million. sales were Net and

XXXX increasing year implemented for challenged saw in GPF sales. month. being certainly markets. both year the were severely diesel end growth adoption regulation markets Strong by is impacted in recovering where by the faster and market nationwide full COVID-XX, our continues content Despite over Xa China the While automotive China, than we our Europe in sales GPF we this and are

We in sales are Materials Specialty premium pandemic. cost fourth XX% million had amplified ahead billion, decline timeframe $XXX and year-over-year, and full original were demand income during strong volume cover the XX% and $X.X up of year full The other $XXX a our up materials were for business. innovations. year-over-year, QX from X% of an on by build XX% up sales quarter year. was performance. connectivity importance a market, sales our to the outstanding driven million despite $XXX higher and were million, computing of smartphone strong XXXX our Net GPF

in Ceramic our new Glass market to Our as Shield and performance. semiconductor products Victus, contributors innovations, as important the well including Gorilla product strong EUV were our

bioproduction capabilities and to I'd help to something Sciences get of its importance full has access the to broad Life product our I to portfolio before Now pandemic, great our we're course, Valor media market playing results, development Sciences test the us. note Throughout Life of supply world applied like in platform role consumables kits to products the research-focused and, our a our our pandemic. traditionally Glass, vaccines. From vital transport combat to and our the and of

second million, million challenging segment Sciences $XXX products, in clinical was were XX% year. sales up used very balance established generated in products bioproduction results. Now let's by million, sequentially. quarter $XX free strong including for income of year-over-year our summary, navigated demand XX% up fourth at flow sequentially, sheet, Net and In strengthened $XXX driven a X% the related the year. growth look We and for successfully our COVID trials. Life cash and we XX% year-over-year half

we As momentum first expect into to XXXX year-over-year the look accelerate quarter. growth we and ahead, in have strong coming

core billion expect $X.X $X.X low first we EPS billion $X.XX, $X.XX quarter Specifically, quarter of end double year's in sales of first the to range. to which and last $X.X compared EPS of the last the billion to year at is

full in will expect the as more more in For year, XXXX and growth generating year share anticipate earnings, And XXXX. progresses. we flow and than cash we we with in sales the free you

prudent turn capital commitment Let's to to allocation. and stewardship our financial

fundamental remains same. Our the approach

We forward. our we strength. strong will portfolio continue very to We going and operating our financial expect cash to generate focus that continue utilize and flow,

to shareholders. grow, to will cash our continue and use extend leadership our We reward

first to is cash strategic invest extend and in our RD&E spending do and investments, of M&A. growth our Our this use capital for priority our through We leadership.

we priority return cash share to in and dividends next the shareholders higher of sales. opportunistic we In XXXX, Our in have capacity as place XXXX, excess to form is to CapEx to meet similar expect repurchases.

updated capital any capacity go require investment more invest additional throughout year. We'll keep growth, be customer as supported support we a to additional we'll we the you if commitment. by would Now

this pleased to reinstating Given we That repurchases profitability. our free XXXX, and expect distributions sometime includes our highlighted our expected generation sales flow closing, strong to growing share shareholders. by to very in year. with we're strong opportunistic In cash close XXXX, increase

set We focus rich continue on to of opportunities. a

progress long-term move to drivers fundamental on. Corning Our sales industries continues goes to to serve, Q&A. and year are More strategy markets. our they Ann? I With the the in the our look to And end sharing that, outperformance forward let's relative deliver businesses growth our to as

Ann Nicholson

the we're for Thanks, question. Tony. ready Operator, first

Operator

from Thank Long you. first from Our Tim comes [Operator Instructions] question Barclays.

line is Your open. now

Tim Long

Thank on if two-parter, I you. could, A display.

obviously, QX. dynamic, Could a strong talked First, for tough a bit environment and bit that's pretty you you supply little pricing the a different pricing. into normally talk -- little about quarter it's,

the talk little China, And do think on impacts cadence the the normal from the the you of rest Korea hold you about second, the providers can some year? to as big a been little how So kind about pricing then of of, move bit. of a bit it’s year, that throughout of it,

the So either curious what side? are, equation what of the your that would pricing the mean thoughts you. Thank to supply or side

Tony Tripeny

the several to continues as demand you need standpoint of meant we supply standpoint. that last the glass of market I next we Sure. what a that -- And happened it's important to about more be tightness inventory a did the industry panel -- throughout was from I that think demand meant on had that makers a robust And things than brought think chain to will from met, in Not year. where over to the replenish the XXXX. what's what there's tight overall only mean, expected, supply meet was a but standpoint. that over that industry happened display some we second that's is half tight quarters, from ran year remain higher what's which of the The think as happened confident expected. utilizations, remain the chain because demand tight also and down those and and also

that, So And that's, environment continues. think quarter. favorable to obviously, led quarters, the environment continues, as next that pricing that look over in we we first several tight very the out

Wendell Weeks

Yeah.

is everything the outage Just that obviously, strong, close building power tight. the was glass took tipped because market a to was industry. in Then as the the and tight everything were now. of we planned -- competitor Korean and with that a for We stay far delayed Glass think I a the going as can on Tony’s, because being of shortage. you're, see operations, shutdown right tight, having so watcher

even quarter stay very going led we one But to we're address very go being shortage. And from very, to So as strong pricing tight that's to we the what tight those. went environment. into

to continue their to Koreans ultimately, now, press supply I because right able their think us will help just it's the big But and Gen transfer XX.X plants Korean be economical. them to sense? to primarily continue continue shift those more very being still, they'll a end firm end to they're this because Does those strong. that operations, not when make Does answer your date is that they question? providing over, see for market they

Tim Long

Yeah, China, position? curious Yeah. outlook in the way longer of -- changes most impact of if that I'm the to term your delay here production change just any China it the moving great. does overall if of the view of in the Koreans moving the

Wendell Weeks

Well, operations. is plants produced advantage, just XX% full. when those these well than you're I know, pretty stays that especially with roughly a so panels, is less capacity demand fastest that they're think because glass XX.X the Gen behavior powerful productive integrated force seeing a at I set microeconomic don't then about assets, The cost low more our when production cost ultimate

Gen plants. right to the continues still I continuing movement those XX.X bet think that big is as so towards grow, And

Tim Long

Okay. you much. very Great. Thank

Operator

you. Thank

Our next question comes from Shannon Cross Cross Research. with

is line open. Your now

Shannon Cross

to and Thank this much just conversations grow question. vials Valor have to bit how the the Thank know around related taking for you. it's XX small business? from maybe you curious base, COVID, I with uptake, changed months. strong partners, of how Glass the opportunity very thoughts have ability your further small, timing but of investment just over and the a for a the XX dig And I changed I'm into to wanted my maybe next to given Valor

Wendell Weeks

way opportunity safer. we view of the Shannon, to all this us help an make So Valor, is is

And any so our we're rather plans. of one first, than with going previous Virtu

help We're And so billions because that finish fast Valor to ways as address our want try need looking We world other to the to now operations make can of other fill we sure doses. really are that medicines life-saving as as can. produced. full and can we at shifts be accelerating on technology also this, for

very thermal bottleneck so Many fill that increasingly vaccines of complicated once is that. And going uniquely do the is cycles shift finish. qualified do. that And our positioned have we again are to towards uniquely and to to technology

answer more help technology it's our all long address deck, lot So said, have this short a our view, to vials, answer. platform. across to to is this question, leading just now increase Valor trying we personally to of the key on increase sort simple I is have changed of question That's make a a your production, program to Really, answer applicability switched has engineering how hands bottleneck. your need to simply to upcoming Shannon. the it our could a I

Shannon Cross

you. Thank

Operator

Thank you.

next Mohan from Wamsi question America. Our comes Bank of with

open. line Your now is

Wamsi Mohan

Yes. Thank you. Good morning.

firing share the curious some confidence you can going growth be cylinders seem And this I'm if the Optical on is segment of you're across to that fact is in how maybe all Can customers largest on of a the say XXXX basis confidence viewpoint Optical, of quarter you versus of the giving to about high-level expressing you. and to on Thank in really here. on maybe rate be So growth think you going grew the sort us course year-on-year which continue. pace would changed and now with that's quarter the you conversations help growth? profitability? recovery the and contributor your and have through XXXX, you the

Wendell Weeks

Well, let me first standpoint. an start with Optical from

fundamental several are standpoint. we the higher of connections calls, users think, last more calls, even from this there talked on really as were was of a quarter the beginning and demand how I positive focused have think belief is be demand in to going performance, our bandwidth that increasing in about in their conference and that. last plenty to talk about And examples that we've business about, our customers I that

pickup And that confident that, or that our up. year-over-year sales is and months to I to pick rates, and our four drove it's on last the think and is have what order happened happen. over order sales started we're is the what's going in a which three growth really really why rates basis that growth

think I And when that the So it now. is I before was going happening answer it's was, the question to happen? think

into think, still we and think And in very year, the standpoint, And there. think to we overall a quarter. a quarter, then not strong clearly, the enter first world I greatest in sort call. focused an how actually But standpoint, on there's to that about was it the talked just understand expect we unique where other there's we're out. about. the When lot a we happening and have position so, economic of uncertainty fourth optical through two that's that strong uncertainty had from And can how as the we places I we the think that play from areas during insights. better going what's was display is a We that's provide and we to to

Wamsi Mohan

Great. quickly Okay. I Thanks. could If follow-up.

for change not the as then your really through the you down pricing this have glass. contracts market XX.X And first I you the seeing year? articulated QX QX But very that you're you is this a pricing year, course moderate the obviously, saying ramp mean, this this is unusual in in capacity, quarter. we step should going Gen step big down. and the you to reset reasons a on in rest year, relatively expect we're very price -- pricing. through tight. LCD the is of seeing to cadence have front, also the Typically, you of why Normally, the you're a all as noted, better stay On Wendell,

customers, some with step fact, In a up. you're seeing

Gen pricing in ramps to past of capacity should or we of that gee, pricing should the accelerated through going So years, take to has as XX.X, go as pressure see maybe year? very moderate, it as just we with course more you you're very, that pace actually the more expect remain

Wendell Weeks

totally for in in I you expect that a your of best had move, different we've because as environment than of though, we'd it, Wamsi, that is sort moderation. of pricing of pattern moderation decrease. We quarter I should decade relative little question pricing one normal. the think think get a in terms continues. the The had relative

moderation. now, favorable quarter pattern And so it as question in And we the a right to legit, in current us but quarter expect at like, look the we said, exact looks is, pretty our tight the one, it. And see continued quarter a pattern see way to out. it the of totally we Tony is, -- plays two do let's take we And time. how remain

Wamsi Mohan

Thanks on quarter. the guys. Congrats

Operator

Thank you.

Asiya from Our Citi. with comes next question Merchant

line Your is open.

Asiya Merchant

little face opportunity. like the if into expectations with a Tony, ahead, here on actually. undergrowing specialty, smartphone as would Specialty, a your strong recovery and down OpEx, very quick on And strong for a that be One bit dial you guys couple can of you for Thank But great. the questions. deeper Great. performance A in you of declining then for clearly, well, say. that trend of bit the that conferences just despite should at talking Can internally you've thinking well-managed you and talk here demand are I about growth you. OpEx of, you're well-contained or some changes be -- XXXX? about to that seeing that the Thank well-maintained what about, you're into are recent us here, kind the done OpEx. the secular about should very on

Wendell Weeks

Great.

OpEx, make Let's then briefly on to macro more see like Yeah. comment year. how And touch start with would and little a the I'll we on specialty. I

when of we clearly, XXXX OpEx cost. I things we see an a adjust operating number things and were to from standpoint, got I parts the early did of -- our into changing, think

able up to that. that be set would so recovered, economy the to were them be we as to able has of Some respond

as our And Some standpoint, make an fast from very OpEx our we also remained OpEx sure And over from related, an grow that our like longer period overall and leverage of getting that. furloughs that OpEx course, standpoint sales. as business standpoint. we we've degree underlying But we were example, don't returned, that's focused things an to for as that them of philosophy has those of grow costs really certainly, grow a and we're time return. the to compensation will from

reuse in as market access that to on share seen our and that technology when our side, customer makes is framework, four, now both that as five what us lay three, us on build do to possible it do platforms, us our we've you out -- for platforms, both is our structurally what ability in organizations. I allows think those our we facing to well

should us generated expect to operating growth we we And the us so just margin that that manufacturing see. at that do And address more a levels. time, allow margin be over more leverage efficiently than for gross to at the powerful

because us the going we're really to more across that's synergy seeing that addressing So our to where portfolio. see start drive really you're

you. for continue. specialty smartphone that on market would outperformance briefly touch We our Let's to expect versus the

not sort with calling what -- happens market. the the smartphone I'm And of

to QX. from So we book be it both interested but sell-side coming, that, really we really feedback a saw in and that and -- strong I'd kind momentum continues strong order broader investors, of, knew We takes And -- me And into point. is quarter. in this which was strong buy, saw the momentum. the

EPS the one. enabled for So provide we to us clarity just in that guidance quarter that did sales

to EPS company and our the detailed Now simple it clear that and sales and made providing previously guidance and market-by-market rather more by than listen complicated we the provided. we investors for entire

to turn we versus put, expect as markets outperformance continue. total year, our and our the momentum to simply we Now our

then becomes in the macro So the happens question what really environment.

predict think don't at and what's your it's have At helpful forces, going tensions we exactly happen will therefore, to in time macro. us confident ability we and markets. be. revenue what our But outperform Corning, going Hence, events and the year we’re all our with is humility. opinions for predict these you Now what macroeconomic we of the experts on are to for own approach great to these and this to geopolitical

pick count various than our better you So macroeconomic geopolitical to can as or for we're you what is going scenario, markets, that. do your on

that's think how you than we but Asiya, more know, be to may wanted it. that about So

Asiya Merchant

great. That’s you. Thank

Operator

you. Thank

Our next comes SIG. Mehdi from Hosseini with question

open. now is line Your

Mehdi Hosseini

thanks taking Yes, my question. for

market? into have would smartphone Wendell, for a you Specialty a Gorilla actually you think when going see specifically And for – Just follow-up enough debundling that so other have industries, a Material. I of do follow-up. the a to from more penetration of a on we're

Wendell Weeks

I your make Could you say more. I to question. sure understand want

Mehdi Hosseini

Sure. Sure.

Wendell Weeks

so let me You always ones, understand. interesting very have make I sure

Mehdi Hosseini

Thank you.

We you and diversification that And Benz. Specialty think illustrate highlighted we what have how end just see of then And other to about that Gorilla like should case. context, markets market? in you been I actually to auto. anticipating instigated Mercedes And Material Gorilla want into Glass diversification of

Wendell Weeks

I totally understand.

good a really always, As question.

for that two highlighted we So reasons.

your way Believe going systems seeing and you providing to is more change because serves start into into of First, that will auto of as at we forward. even our models, that it's also going going macro can not feel in numbers. We're or you okay, more our where totally we it's multiple the more Gorilla your do technology And really those access the various in better find increasing. its yet for takes, it's our that maps. is we're say, not, would point display the of momentum talk And it form feel it glass finding it. way in customers. about opto. platforms forms market to What But its

we'll we'll So as little it, Mehdi. note. important, on that take bit that share we And sure let more more make – a us becomes

Mehdi Hosseini

a you. question. Sure. opportunities Thank Thank And for providing industry. in you I maybe to that follow-up detailed just as other

$XXX does in penetrating that in for $XXX And highlighted I car. the other to whether your some want also as content? electric variability should and accounts content should of grow, of you change auto that how about is for how thinking like, You the assumptions, vehicle that that Gorilla key industry? better understand are we And content think $XXX of we again, segment per about evolution how industry? account

Wendell Weeks

Yes.

So, answer question the I short think, to is, yes. your

of above. the all So,

don't and probably with helpful do. the Ann what share us a be we had we out, that about and great just to all should And let why We'll I be So we'd it'll is, do what we the you build, because it. way don't think And map. excellent an and follow-up we have you report I to think question. got the recommend lay happy be for do, you we -- why share

Mehdi Hosseini

Okay.

I can So ask one...

Wendell Weeks

looking has He's he to I think like Tony add. has something me something to at add.

Tony Tripeny

don't shows that we wanted think as just No, right be not I And point next automotive only we I the can talk later of Specialty the but for... in or would that's our the out any automotive into our on up I other that a more glass is Materials our today, -- sold think great. segment, steps about segment, Why industry now to was we that you I mean, to in to CFO, and talk this. reporting thing Mehdi,

Mehdi Hosseini

Well, thank you very much.

Tony Tripeny

You’re welcome.

Mehdi Hosseini

it. Got Thank you, it. guys. Appreciate

Operator

you. Thank

question Chatterjee comes from JPMorgan. next Samik Our with

Joe Cardoso

This guys. Cardoso Joe is for Hi, Samik. on

been any we us well on through what take the that optical one in come Just temporary that weighting you've initiatives to moment versus walk the to say, gauge let's for hear, businesses? specifically. profitability enterprise apples-to-apples side, done return versus particularly question guide your towards see as relates measures, great business, and relative expectations I as there's those growth doing if me business a carrier the as in and permanent way just has the profile? Can assuming year you a there ago, side. the back of to growth year is any revenues full it the but to And been is for now can focus Obviously, as portions optical on versus, revenue of follow-up on profitability wanted you that

Tony Tripeny

seeing we're standpoint, in from I both business. an think in enterprise overall growth the the carrier and

being a cloud data piece computing, lot enterprise is hyperscale the grown centers. course, what of Of from

enterprise the are economy. traditional by more the of pieces Some impacted

going kind year, important fill parts though And the what's margin you saw carry up, quarter And is even operational that really third seeing businesses. we'd think down. was going fourth back of and seeing we're forward. were expect that mean, those much. knew And standpoint. that, not to back. And we ability that see standpoint, see that supply our to I come costs periods. from You're because always expansions those you and in both those this as you didn't there's change is, to But of factories to an growth I in We from we when revenues it our that during of a note

Wendell Weeks

you Yes. another And also, dynamic. have Joe,

if buying When cable. would buying. you more variability, nailed what's depends when operators revenues or the as is they expect highly they It higher, to Tony players your impact our are our of buy always specific it, which just size that expect is, as those, profitability buy margins There's expand, can enterprise you're fiber cable. another is engineered and in right? expand. solutions, which revenues our complicated, we Than of type what I quarter-to-quarter think precisely -- factor

fundamentals in opto good. think here, which And But quarter-to-quarter. incrementals Tony from be about fill. a it so play back, We is the when I expect to to step mix as you if nailed role starts has would we real think you the

Joe Cardoso

that appreciate Thanks insights the into guys. result. and on I a

Wendell Weeks

Thanks.

Operator

you. Thank

next with Our John comes question UBS. Roberts from

now open. line is Your

John Roberts

quarter Nice stock Thanks. be the and active on glad again. to

Wendell Weeks

John, welcome. you're

Tony Tripeny

to John. so It's time see. no your hear good voice Long

John Roberts

Yeah.

about to the think strategy quarter in had You've semiconductors. another

you any, Hemlock You've Specialty special I semiconductor from doesn't the Materials, lens put trends EUV other, really it's and in going think, from benefiting and it the in on market. got benefit business and and

opportunistic it Is deal So this more an at good that? there to within like point. looks just and

Wendell Weeks

ago what just us first, needed ended so you to flashbacks were so So much side with better I'm silicone because Dow. we almost up when we a with Hemlock decade having make telling do and it sure fit much to me the is better fit with

while. we done, got it just took so a finally us It And John.

feel it. we about yeah, good So

try good make really with see, of some we to difference I capabilities, more are run to incredibly U.S? So or that. and address will Hemlock? production versa? your -- think we, and sure, going it accelerate For that insight from to some here actually, not. a the But I like we're number there's are We vice significant opportunities. in It's of here experiments on Can can make our those economics a to right deal significant they there we ago, think issues is with early the years all domestic and are number or of there's solar out a really work interested of can we of, say, lack too the of to

advocated have have well, given long this. conversation on it I'd for a any you to sometimes, you've as and that how you about love And ideas with

Tony Tripeny

Yeah.

the get to. out of this all deal we We And will is will in those attractiveness ideas. on it with expected paying you say is of back would and John, the I short-term, that, financial definitely we absolutely some do as all that

As you transaction Hemlock put we this into and of a cash. lot didn't know, generates any money

fourth -- lot quarter. they've a annual pay back They flow. back fact, they we'll generate a so had, started debt of in in what cash the of year, And pay million it within mostly $XXX approximately

strategic So we're very financial from standpoint. and a excited standpoint also a from

John Roberts

an question. easier just maybe And financial

roughly think, Investor flat be Do -- which expect the XXXX, that for to at guided was through with it still I Day? target, you modest relatively So CapEx, your XXXX. you XXXX

Tony Tripeny

Yeah.

it bill of what we XXXX, depends and we course, to that capital years. capital comes think in to with capital. in that through with lot customer on is commitments. all, I mean, put over good a it how the next news significant how happens bill several And get have any And growth I first much that growth put a the pretty much of growth. have we comes secondly,

John Roberts

Thank you. Great

Operator

you. Thank

Ann Nicholson

Joel. ahead, Go

Operator

from comes next Steven Our with Fox question Fox Advisors.

Your now line is open.

Steven Fox

morning. just had I Good quick Thanks. two questions.

XX when bullishness, bullishness of how side that side about things? And the outperformance, thinking much are on factoring cetera? and normal Optical, maybe to would those you this Materials the a talk maybe unusualness about in change the into the rate the as on perspective, points et rural or put with follow-up, that you recent auctions device XG Thanks. outperformance before you just is of First, sort for year, versus where a in some be Specialty can versus what the markets, of there's mobile last sales then

Wendell Weeks

that wise our it's overall, which because think well I types for the working a But which as rate you're that a in newest OEMs you our it has the not just Opto, call harder it, I to think you the positive, on higher of it to I too you never lot predicted wanted Steven. it sort that on in strongly number one which you're to is to the total but have a And that It's predict, it though, will invest about when of of wanted of we strong our announcements because our our believe sort that before specialty definitely well, of as particular gets is it you're actually outperform, We technology. depend side, strategy, What wanted positive have order in content, see to we customers. our would and on of in to as our or give Tony our technologies really been products impacts state. to that. is the projects – customers think much but only how of different say, then to right can is very on to meet year We win some the identify did expect we would like the sorry could insight end much little play. early from see are book. putting then of you it value sales. market, wanted that it's been key of I'm do, and us see come. as outperform, to well We to – customers think, it technology market, we could content to said, And the more just more always and seeing Corning to how build never that outperform we is, as demand. to in. What that quite

that's And so seeing. why that's we're we're And what saying it.

Steven Fox

helpful. That's quarter. on the Congrats

Wendell Weeks

Thanks.

Ann Nicholson

question. last Joel, one we'll take

Operator

Thank And question you. Sachs. from Hall that Rod with Goldman is

open. now line Your is

Rod Hall

capital aimed me I working Tony. than than the and at I've Yes. a flow anticipated. got of it. it's in. looking release see just EBITDA guess, for We cash in question, last year. fourth I is lower at lower sneaking one and mainly, – Thanks we're the little the that quarter, we Tony, conversion appreciate

us QX. for nature we away color here. the some So it's year wonder maybe dig of dynamics things and whether there's the could that's of COVID assume drivers that kind understand if one into more move those pretty we in the of into help bit on of go in But one-off conversion, I et the cetera. that us little as you see cash flow and impacts, good I the related normally, a conversion

Tony Tripeny

a of Yes. Actually, cash it better cash than which the little was in our year. mean and we our and cash Compared and conversion, cash our bit -- in talk number NPAT flow is of lot to the were flow a third the the back quite NPAT, pleased conversion same the flow in people NPAT flow the fourth half our about with quarter. our way I the was was quarter,

today, be in But, mean, question very I excited through frankly, the later flow of cash some And cash real we it our to a there, conversion. overall, So, conversion. you And talk of we terms lot of our couple specifics happy that last that on. were happy walk happens flow of of something investors I'd when we that's and with generate And it's you. operating to Rod, were lot in with cash a the that a we're have generate a build is years, saw of us lot back free asked and the we've over been half the when year. we cycle. We this not cash We flow, of focused a flow. what in this about

that XXXX. of more see in to expect We

Rod Hall

Great.

Okay. Thanks, Tony.

Ann Nicholson

Yes. this And Rod. Thanks, thank for morning. joining all us you

XX, Morgan Coast the UBS on on know all close, Sachs XXXX February West the today's Technology, starting and we will to on Conference that March Operator, Media & be Before lines. And disconnect later Virtual I February we will Goldman just the Tech wanted you call Stanley available let morning. attend conference concludes XX Internet a replay Conference of X. that and Telecom site please call, our this our on

Operator

This concludes our call Thank for attending. today. for you

Corning (GLW) 27 Jan 212020 Q4 Earnings call transcript