GLW - Earnings call transcript Q2 2021

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Operator

Welcome to the Corning Incorporated Quarter 2, 2021 Earnings Call. [Operator Instructions] It is my pleasure to introduce you to Ann Nicholson, Vice President of Investor Relations.

Ann Nicholson

Thank you, Katherine and good morning. Welcome to Corning’s Quarter 2, 2021 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; Tony Tripeny, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer. you the remarks Securities meaning Act XXXX. remind that forward-looking Litigation to of within fall of like that contain today's statements Reform I'd the Private cause uncertainties factors These materially. and involve to differ risks, that statements could actual results other in These reports. company's factors the financial are detailed

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

quarter, business. GAAP non-GAAP measures income used management In performance the core the second million. measures are $XXX Our net to was by analyze

GAAP was the Samsung for entered However, EPS $X.XX a due with GAAP the loss to into Display. of required accounting treatment transaction

Let me was case. take this the through you why

a repurchase As into X, Samsung entered Corning a agreement on share reminder Display. April XXXX, with

the stock as to original that at treatment the repurchased can million requires hedging results then record in accounting investor is the so this A in core earnings quarter. associated results found and price As shareholders of EPS also would between for non-cash to part GAAP of our The the been shares section stem a stock mark-to-market of the common minimis traded adjustment agreement, when to accounting and the have share. gains exchange, shares. values Samsung GAAP our reconciliation retained income difference common this], also common or contracts. preferred website This Corning book relations common net core on They shares the repurchase extinguishment preferred XX GAAP U.S. is and Differences de from shares calculating of with removed converted per retained available value corning.com. GAAP were losses to comparable special original from [Excluding GAAP earnings of can Samsung. be into $X.XX. treatment repurchase from The of preferred open and of the were the an immediately stock earnings. extinguishment between

webcast; website our downloading. along. the they're I'll core Supporting turn to now, Wendell. may call to being analyst results segment. are You with encourage for on slides also our interactive a in follow downloadable access over website And also we on you financials on live available the And shown

Wendell Weeks

Today And quarter we're Thank for second flow growth XX% cash businesses. grew outstanding $XXX grew ranging our No quarter year-over-year million shape. you sales story generation XXX% see we a for to specialty for the strong results, sales with percentage to reported EPS to technologies. Free great out environmental higher materials first margins. and to of clear across playing everyone. year. and on a $X.X million. second grew morning good XXXX, double-digit by $XXX track grew on a XX% half five $X.XX and expanding we we're billion. XX% our Versus sales XX% cash segments in question, from of Each

is Now, total an of second think XX% we've quarter added course, compare, of Since of the sales worth we so XX% respectively. company more and second quarter easy even EPS million $XXX more Hemlock strategy and content with $XXX of Corning is growth, competition. from About sales. million from coming organic quarterly our in XX% outperforming of more dollars billion that a success and it's that grew XXXX XXXX versus and half the than I XXXX, was than about noting

We and opportunities and more content our we're In transformational is prioritizing of trends. each seek other market. drive to expand addressing The our addressable total portfolio by combining rising the and organic market focused XX% for growth Corning. significant of with capabilities platforms, our market from from access

on collaboration facilities and in our investments for leaders Our core intensity. market pilot we platforms, production. us distinctive create among processes customers existing engineering plants capabilities. early is through and for stage the the them create access long-term complimentary our and a on Capitalizing of by for proprietary among We're age five and close allow our built return platforms. technologies benefits set taking strategy synergies R&D, on synergies core to our insights three capital in manufacturing our and customer, of gain products We leveraging breakthrough reduce with the and and our advantage improve

XX.X design But dramatically and Valor We over few processes in that display is to manufacture created the by solutions and also before Gen were creation projects carriers We knew our We investments and we scratch that our cell proximity glass plants would needs and that as often plants last we're would thinner demand, with build we using increasing need arise told manufacturing And equipment projects of you need build We When revenue how tougher as past our therapy, cameras. example, to durable densify would to when builders. and companies would have responding these described do and culture in Glasses, create, state-of-the-art to resistant designed We're commitments build A and that years, to are in not regulations, demand de-risk the excellent committed need car growth companies gasoline customer that creators. we auto-grade they you XX.X BOE value requiring opportunities exceeds fiber customers, and increase products to capacity, meet strategy and need filters likely phones that world. bigger products, shield, increasingly demand to ease OEMs returns. cover close glass particulate passive smartphone build meet pointed we support to these efficiency Gorilla We cost these build, gene innovative our they optical Gen proprietary post density we existing increase including just construction. including high funding ourselves, build. and that deployments. glass, generate our For would scale. that that customers. we locate world their capacity focus, to delivered new ceramic its on AT&T the at and continue pay-off our would biotech packaging, need would XXXX networks glass, Verizon a drug directly network We detailed pandemic to for panels, the investments XG. We cycle. invent, that like from commitments. we that new beginning extend for out meaningful our more knew

billion are sales rate invested XXXX percentage ROIC delivering. our XXXX delivering They've undertook they've us XXXX We helped to rate on total to helped Today, above build us our from company improve projects from current we return XX%. and billion of XXXX the are points. increase collectively $XX and $XX X run in run by capital

our often In without extend where our building enhance the today. the facilities. we we growth we of new revenue capacity. are we're that to part these and keep extending and cycle exceeds drive innovations. and create And [space], our build, because opportunity we time improving scale, new successful capabilities, creating actually this each increase innovations in can manufacture constantly and demand we productivity spend we it’s so leadership, until Importantly, and extend we of most our this our time we're And

feedback we and We capabilities our lead, we we As better. new we of opportunity, where push assets, and capabilities. boundaries the an indeed of to enhances increases Every a pursue our we areas directly the that just loop our cross content getting train keep our value our strategy. In other already explore in our customers. adjacent our reapply relevance people our this time combinations expands ways. best-in-the-world words, insights repurpose and capabilities, important in knowledge, we've fuels positive And created

that the people We putting products stuff into more in we're with that Corning on aren’t more people mind. exclusively buying already buying, relying are

across initiatives, and our We Apple support launched its to each increasing which Mobile such million cameras. R&D. as angle our Let's strategy lens just increase to telephoto, transform $XXX In value additional the DX to and last strategy the DX+ is look wide Corning likelihood at adding Consumer increases the advancing growth are to for with manufacturing a by date, people in optics Glass market Gorilla the we're Manufacturing awarded those cameras with some and devices. category in access smartphone also which capabilities, for $XX million media experience our lens we designers with Corning their enhance initiatives from interact use advanced to features phone photos. obtain we offer damage. fund. the Advanced and we more United capture of The with To infrared consistent customer turn we've from total cameras, the States on Apple's important the These continue in devices. our expand and of also quarter, new of And Electronics, They're sensors. In the application of our We've another of capabilities an naturally way received size. of platforms. our mobile announced commitments help and build in social Fund capacity prominence supportive area, us. is Device an around to More increasing scratches surface chapter Corning, week, lenses, the centered integrating and help

material Our is DX reflection with Samsung composite the combines and durability glass approaching providing adopter. that increases by resistance a quality sapphire. low image scratch camera first

Mirror product automotive, We're are technology to and trends. Automotive, to driving across entered solutions. precision content Solutions. car and uniquely products, OEMs auto-glass Turning We're category a designing these we with address suited And opportunity new pursuing that per creative $XXX emissions, recently enhances the a vehicles in Curved experience. glass safer

in display system new their are sight. display Our crossover, letting Hyundai’s while The X. keep turns drivers the the on directly information head line speed screen, electric windshield up navigation the road, essentially assessing reality of enabling and IONIQ their in the into a solutions augmented eyes

new annual timeframe. on surpassing well generation way million a of helping our filters is of in sales original ahead our to $XXX Additionally, gasoline particulate GPF us

fronts. we're We're pandemic the on ongoing to delivering response. in growth Turning of Sciences, global support multiple demand Life seeing

OPTIMA to the franchise a a content making dollar helping building Our further that increased market. increase bio demonstrate In toward packaging filling capacity gene in Fisher customer We wins. by we chain. the cell Valor to quarter, a multi-billion XX% therapies. critical inventions transition Glass alleviating valid pharmaceutical bottleneck significant medical opportunity in supply Thermo And production with and pharma advance are thereby secured additional second worked the the nearly strides and speed solutions we're addressing and

XXXX expected of display, and moderate we’ve creating half of applications solutions. Thermo Fisher cover our in as patients.’ we game the our Turning by market decade. deliver repurposing for has a Gen we’re XX.X grow Gen called features billion display leadership us Corning’s earlier Gorilla of and generation our experienced efficiently given announced than to official high-speed facility favorable which glass superior and panels. launched the such to And most more serve for customer fusion vials profitable provides competitors, XX.X some our size Glass is our a products for sets. XXXX. XX.X second than economics double-digit fill/finish prices. more display dollars avoiding larger We position. increase opportunity. of use the glass Other display with us enhance makes to capital pricing allowing production the ultra new glass approach Over a in to in to to economical Gen to XX.X that to ability for illustrate, This a large our we our is opening results, BOE emergence recently Valor glass. the relationships ceremony more environment existing back, To collaboration resulted enable a CAGR us projected significantly their in in glass, [innovation for has repurposing Corning remember shareholders, substrate of most changer in large its a spending. Our tanks hosted large OPTIMA’s Stepping XX.X while deep assets. our our business combination ‘a of a the producer through us Gen customer time, co-located sized capabilities] provides the city and And than more Gen strong cost Meanwhile, Wuhan. fusion site keys for unique automotive back options plant, at substrates lowest

is that communications. We look momentum multiple energized momentum sources. at see optical let's business. confirmed by by in this Finally, building We're the that

projections. versus Demand have to to need. double only which has XX% network XXX XXXX Global according million by quarantine the track up industry the on on of XXXX, XG is and versus peak for June levels June was period. First subscriptions up a that they're been almost increasing. Broadband network end grown was XX% usage pre-pandemic to and

and to by ‘the XXXX mobile quite cycle The CEO said the second both fiber-to-the-home, confirmation and our is coverage. priority, customer top million expansion communications, fiber of homes they're about performance with high that have being XX% commitments. of fiber their XX passed locations, believe customers. And earnings our including customers our whether capital XG X deployment Director we're XG, public many expansion. or perspective recently their He planning early optic is business expanding broadband and To capacity actually last by cloud achieve this, XG increasing shared have centers. of And his by about on a consumer massively call plans. hyperscale Managing networks and data the down. that to their Microsoft We across meet aren't we network.’ shared recently innings data adoption large in curves year-end On ‘Digital expanded slowing investments said, are AT&T to Deutsche He week, Telekom’s demand. million they in expect are CEO said, footprint center

confirmation the is next few growth order and In quarters. it's important is third the fact, the they're perhaps our indicator most the beginning.’ of Of which course, book, over accelerating, just

we're enterprise double-digit percentages in and networks. in carrier year-over-year growth both Here, seeing

During in low fiber], with superior introducing bendability, solutions extended market and Communications that offers the loss. compatibility combination an SMF-XX signal little first which our [Corning quarter, technology industry fibers, We Optical and we Contour launched network leadership of deployment. by other speed

model time EDGE Connect capabilities. XX%. large and where cover and are cars cleaner, converging helping where are and by value solutions trends ubiquitous markets, individualized, world and with by lifelike medicines a can installation reduce are connected, creation from more our effective, increase that our our with key launched you toward that customers and more is see also that We're Rapid device that fiber do nearly growth density driving and mobile can and We our protected where your you autonomous, move safe, up around capable. displays infinite are bandwidth, customer Across more materials to

with things what always up Now, I'll do that one how accomplish. is I've said important remarks as today my point. final we as we wrap

a our thank we published So, that is And sustainability than I stakeholders. behavior. on difference committed more can. we're emphasize And I'd incredibly all building making to want first like report. dedicated Corning inclusion. all we respectful, honest, and moment to our on fair of providing century to focused exceptionally On take We're a to operating well wherever a and dimensions, must continuously value our improving diversity, our for of into recently share we on annual behavior to build programs. hard progress issued of world our insight on And To and the all around employees our work. our continued on such the second social, you for governance environmental, our their characterize in toward approach, report actions, our equity, we progress forward the I momentum as look updating half year. including

to quarter. you the more turn give so I'll can call the some he Now, over insight on Tony,

Tony Tripeny

Wendell, you, and everyone. Thank morning good

a As strong Wendell are track we for said, year. on

added we billion almost Second cash sales quarter and We outstanding. half results $X a levels, were a flow. operating pre-pandemic in free and sales generated billion year-over-year, over significant in

our board, highlight our has EPS. to year-over-year, contributed strength. margins comparisons which Across strong improve particular, very our positive. progress In been and pre-pandemic sequentially also We both the

momentum unique In our We of effective have profitable will and in Corning’s shareholder capabilities continue. to strategy outperformance us at value. value drives deliver place model growth this trend, a center are substantial a creation the we markets, content and our while put highly create growth confident

continue. increased Sales Communications business billion, income across experience drivers quarter and that Net you XXX% walk million, and Now, most year-over-year. significantly saw key $XXX year-over-year the the let up and run and decade. performance. Sciences year's lows. Display rate. growth, XX% XXX% in EPS our and consecutive last environment environmental We up Life strength favorable their expect a second segments. delivered sequentially of was strong more than a was Technologies $X.X grew to to versus Optical year-over-year to third its up continues see metrics me markets continued our pricing $X.XX, trend outperformed and through we year-over-year quarter of pandemic and was

expanded basis to operating points gross margin improved On points year-over-year XXX basis Sequentially Our basis, points margin margins XXX operating gross points. basis XX.X% a expanded margin XX.X%. expanded. XXX basis and to improved XXX margin and

continue materials resin, businesses. of optical Sciences the the QX. was Life and margins, raw allowed air and rates supply the reduce key a During we headwinds. In to component freight, and us the on and quarter, sequential cost offset certain points we such our increases by costly as chain inflationary Planning output improvement shipping about felt in basis XXX increased disruptions in in to but total, face same drag as

actions, don't mitigating over on we're in normalize expect lines. we significant raising short-term, while Now, expect And prices the the cost do to taking selected including chain time. product improvement supply them we in

Now, second increased outlook. year-over-year. years cash greater dollars $XXX half in was expenses Free operating was The our as flow rising million, cash with million. increase quarter, because flow than up is sequentially. of XXXX variable larger consistent usual compensation $XXX in free million the the for was of prior accruals in first $XXX Cumulative

the cash total second We suppress by expect year and free XXXX margin. significant flow in the half wide generate to of our to a

take increase businesses. moderately, let's versus sequential million, and sequentially, prices up And each the Net In sequentially Technology, Display during closer million, implemented income sales of a performance year-over-year. QX of as XXXX. the XX% our increased was look and X% we XX% second $XXX were quarter. XX% Now, $XXX up quarter price a at

the will glass remain the continue are will quarter, For favorable factors again. drive forward. environment to We prices this. third going believe we once moderately pricing Three increasing

in remain supply glass the First, tight we short to to expect upcoming quarters.

at third, profitability operations. levels. existing to pricing manufacturing And capacity in investments periodic continue to challenges our current competitors display requires glass Second, maintain face

pandemic industry. how impacted on receive a the of Now, questions has we lot display

in take be three two the I’ll view. Since and only focus in the of glass impact the and down glass mainstream on our on XXXX never moment to in LCD typically XXXX, XX% market? below explain XXXX, units LCD Since television XXXX, me units screen market. half times million, what's annual XXX as year. emerged years since row, trend there TVs XXX or above the sell-through TVs about smaller TV home. about example, an inches, in sold have units total, televisions XXXX, So, average from glass they X% studying represent of technology XXX was let has been and a and million. For will size declined. demand inch never demand television a and about lot about bound more range sold trend. a was size working, In XX% increase people accommodate probably growth living, and In between global up grows a A while Screen about million to X.X glass to mid-single-digits. line are TVs fewer

XXXX confirmatory. by Now, entering especially TV and for larger return. inches increased percentage. is revert mid-single-digit smaller high-single-digit We smaller first to in implying to the TVs, growth trend, a screen over returned volume size average we it half for decrease the have and the declined data through per down continue to trade percentage TVs, retail expect X.X XX-inches televisions and were expected and growth year, largely a year-over-year now Unit the trend. of year the of units, a TV normal market inches while units by XX%, X.X size and in to

and Now, grew. consistent glass market history, math with the

size are So, out. seeing X.X the playing down growing for year-over-year our approximately halfway year, screen inches units expectations and through being TV

trends. think units TV units and continue Looking ahead within screen inches. about will to the size TV size That historical be grow screen X.X to typical and follow range means we average will XXXX, will

season yet current have the Now, out. see retail we holiday plays to how

have never driver screen grow size. World increase average units declining on too is declined noting Cup we So, year. row. year worth the retail World TV a in never finally, which this in expect a is screen to the definitively year declined We again years year. And units, information a years once But enough most size that to inches two X.X TV next year, in of glass in And Cup have year. biggest would comment it have don't growth next much are and is next the

retail season, and of front will us, Now which keep where is on based you in find our we still year's views this updated. holiday we

favorable. $XXX move on operational capital and its to of strong, sequentially. and volume response, year-over-year. and a a high. all-time growth by networks enterprise access. XX% world at are Let's Sales broadband. continues year-over-year, and and and accelerating, Demand billion in both improvement. The is Communications, centers The reach data of double-digit to spending this XX% up capacity, extend across environment initiating points Optical Net the operators – million Higher which XX% sequentially XX% a carrier drove the and dollars, by industry. sales increasing. to in performance sustained an year-over-year the better start percentage sequentially. income builds our surpassing capabilities, with extremely increased pace was Governments expanding is of network announcing and plans the customers investment networks phase of is the In All are around is

market capture and we're the well-positioned leaders are to increases. investment significant as We growth network

Difficulty]; solutions additionally efficiency of manufacturer allows [Technical which and improve on capital dimensions not only large the important scale to Optical Indian to us Our Solutions, competitors. innovate available is speed Corning of the

Our year-over-year Car results sequentially. Environmental and rural due as Technologies, but markets were continue partly hyperscale year-over-year $XXX income in adoption Difficulty] vehicle sequentially, our to to versus freight GPF Europe and and China. automotive quarter. which put improved broad data In production be grew and by centers. shortages, Net XX% impacted us in sales and million second logistics related $XX increase the XX% QX. sales investments constrained sequentially X% second [Technical chip improved customer costs continued Auto at year-over-year, for the and center squarely quarter down broadband, million, also fiber-to-the-home, customer leadership XG, to technology unquestioned of up base

We as of timeframe. particulate to the second our $XXX build gasoline million the remain supply on year. track original demand through and half chain in-market business of activity are a go filter We monitoring ahead we

emissions. generation levels have continued even diesel, continued customer's and OEMs We by driven achieve sales ship to next to continue the innovate to and to advanced American In China, GPS XXX% challenging truck of customer year-over-year quarter. North of heavy delivered Materials most treatment duty another lower problems, in outstanding begun Specialty after market. adoption our grew help in recently solve strength

sales our materials the premium was XX% glass year-over-year, Following IT first [XX%], quarter remains of second million. quarter in cover $XXX up at Demand products. for year-over-year strong with

quarter, the glasses supported semiconductor and or X manufacturing, phone advanced XX IT our During Glass. EUV premium Demand ultraviolet used for remained featuring and content surfaces and with new and also for laptops in along deep ultraviolet smartphones tablets, strong lithography. optics Gorilla including multiple launches which are essential extreme

and investments then commercialization XXXX. Now moving in in net resulted that innovations lower are income towards

million, will As up we've as processes. consumables. we sequentially in noted our by XX% Net ongoing XX% can come was learning operating second diagnostic for X% were quarter high We demand income related academic develop by year-over-year driven bio as million, before, scale sequentially, profitability research $XX innovations the Sciences face and Life up vessels recovery and and the higher and driven we year-over-year, anticipate utilization. curve and production newer sales and labs that continued improve solid strong manufacturing performance. and cost X% $XXX pharmaceutical up and improve sales

and let me said, business are our capital has moment to allocation. strong. to our well reiterate commitment our markets a stewardship financial performed That and So, take very

same. the remains approach fundamental Our

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

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

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

shareholders Our by X% dividend by excellent of next quarter. we Samsung retiring and priority Display. is from we quarterly an outstanding year, resumed repurchases. shares our dividends return This X% cash increased closing, excess and buybacks form the and in to share to common opportunistic of repurchasing our had share In

performance relative we to XXXX are and for track an XXXX confidence adds our on outstanding year. to both Our that

of to third range per core we expect the share $X.XX earnings billion quarter, billion. expect in sales $X.XX. the $X.X And in range to $X.X we For of the

working. Our value model creation is

repurposing capabilities, and We lowering from With our innovation, success, as we're I growth. that, capital our are more pursuing move and the our opportunities of year cost on. efficient. goes forward that capabilities portfolio progress to reapplying Ann? with of look let's By our probability cohesive focused drive increasing you Q&A. utilize and to to sharing becoming

Ann Nicholson

limit get Tony. our I Katherine, And can and ready one to that question please you ask so we're to everybody. we And Thanks, – analysts for question. first

Operator

And question Long Thank comes Barclays. you. from [Operator Instructions] Tim your first with

line Your is open.

Tim Long

you. I’d two-parter optical of, a Thank just ask, kind comms. on

the How that as like comms? margin just it in talk is little the a of markets? lot operating And kind that for optical of see the margin a of, industry Thank in on both how follow-up Tony, you of bit a you Sounds it cadence just more about room positives if service you and could in the quarter? bit there growth provider leverage little Could hyperscale much talk positives see about front there. and business, the looked like for you. was vertical you in these solid emerge

Wendell Weeks

to make And place that's at sell for we could our if cadence is. growth, that the we more. attention where, going on this what first is So could more, time, where we're

cadence optical to in communications. relate going that our more than that So, is to you'd normal see seasonality

be so, And expect continue and that our productivity. we cadence to strong aimed to at primarily

Tony Tripeny

And working those. we're, right. continues and from that it know, have mitigate mention to do that think We business grow. we're inflationary headwinds rising I’d we some operating headwinds come costs have as certainly with this the to you facing. Tim, you're will I leverage mean, I do

of know, out but next there. actual you leverage couple quarters, over there's how of that terms is, the the definitely happens in pace you to play So, of operating leverage know, need we

Tim Long

you. Thank Okay.

Operator

Thank you.

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

open. is Your line

Wamsi Mohan

and Yes, year details Unit screen the display on so business that’s next. thank the this size here all growth side in growth much. affecting potentially of the you and Thanks TV for

pricing in as in in Now, well you on better remain environment? normalized to XXXX, translating strong the to pricing dynamics a can you. Thank single-digit also so, XXXX, price display a how you low-to-mid do had view glass? declines very reversal demand outlook pricing the supply sustainable see performance or you given current Do

Wendell Weeks

question the for Thanks Wamsi.

to And continue early pricing the very on about a of some we things moves stabilization doubt, how think our you environment. the to here effort. fruit. of period a many And pricing lower for throughout able I that to feel strategic strategy us going Without that improve there's with and the bear be technically, on next year. it's continues that pricing give long-term little have we been seeing pursuing guidance to are we're intensity our time that

to this quarter in those continue we'd sorry, like factors as out, Wamsi. about pricing. now, time on place. guide it's would to to right So, all probably I'm far But at we be expect as one

Ann Nicholson

Next question.

Operator

Our comes with from Asiya Citigroup. question next Merchant

Your line is open.

Asiya Merchant

Great, thank you.

investors your talk it resulting you of sided how about to of out? as have, into are the as due Some the end in if you. maybe supply you risk think components excess device push the and demand. a TVs, talked and relates they in inventory which channel, And demand constraints, end about any those if to there's end-markets? but lot know about Thank go two in maybe can Tony you caution smartphones I know, notebooks

Wendell Weeks

Asiya. Thanks

let's the part. start So, with first

number revenues in demand of strategy The It by excess a examples, has one, been outperformance really the smartphone our number demand Corning the hasn't is constant, remember, law of like, have in but in market of there's over grown. of So, pretty is grown great our general, course driven More smartphone right. last where XX%. years, now

across so all the plays started out, device that different really content categories. And really

on a of of consumer always the of what's time. there's going behavior mitigation impact given degree at So, any with point of

So, that's put first to context. in

which way the do of long-term, into guides, in about into invest to business we're of tried planning near-term. and in thinking that behavior the is the We we've and range though in what outcomes consumer our forward, Going our right. place

behind But so then integrate serve trends Corning impact and you. to really quarter really markets of core we're know, So, information one we for the broadly. in our those us, technology it We points get ton strategies. view because give other More the a investment we to strategy that into that those we for so you able try to call of the doesn't being –

there. in it’s is, version short guess I So,

view that learn as there, is of that more. all the point is we'll view we and of point in Our update

Asiya Merchant

out point, auto opportunity, about able given come reaches that glass in provide And where in you the then more know, for in later, bottlenecks on XXXX a expect just works auto you guys color you should a production can glass, certain that, to I the to then you. Great. to Thank it where at still talked that or we had I something is think run know on call point rate the one XXXX? all being automotive

Wendell Weeks

question. Great

And get on around we us things progress. great in to way out right you figuring So are the going guys update to now should glass. that right auto for

together trajectory So, investors the everything decide understand our our get industry. act to have is going just help how business. our the in We fine everything's that to innovations, with we fine with going do best

thank So, That's on our you for to-do list. the reminder.

Asiya Merchant

you. Thank

Operator

with you. Thank [Operator Our Roberts Instructions] from next John comes question UBS.

is open. line Your

John Roberts

Thank do quarter. gross you When pre-pandemic back to you. levels? Nice be think will margins

Tony Tripeny

mitigate of pressure. lot a And we're you around we now, freight know, know there things facing what lot that, we resin cost. to was, course, saw increased and plans logistics, So, mitigations, occurred, you a did first actually other clearly relative disruptions inflationary the know, to but had and we that supply that, of then quarter of you in particularly those chain right know, you were

think let do know, chain inflationary those quarters, XXX it least the to thing. of drag least prices at over couple from to the that how next third for know, in that's, as, to cases, think for and got the for logistics particular out. it mitigate to thought continue but guide coming do we you those play that, you We about will of But So guide, know, We And you quarter, just product just that would continue. certain assume some the things – see we points the in we at long and mitigate lines. you prudent raising of supply mitigate lots again, to on we'll same was know, it that need exactly we basis including, believe drag. time, it costs takes to we you need know, you

Ann Nicholson

Next question.

Operator

question with next Advisors. Our Steven from Fox Fox comes

open. is line Your

Steven Fox

Good Thanks. morning.

of going drag can that for a called The us terms more spending said, the those and it one Tony, sense XXX he what on just in so just that changing. margins a how is clarification on operating quarter-over-quarter subsides? points, on a pressure on you materials specialty And Just forward was you big out, give basis margins. inflation then how the investment on aren’t

So, how it's think saw QX, in the about it? is we same amount should in you dollars that that

Tony Tripeny

some to it. mean, as of plans. as mitigate implemented know, thinking We actually pressure. we plans happen were, about what inflationary we know, do just have guidance, know, some in to have QX, again that. QX, those thought, Yeah, we I you think that's us where how you happened We've said, we I should it we areas, could have you where new to in the about us

that's saw have then it. that's margin from It's I in impact but Materials, on margin, did just mean and impact at a right. of not results. the you materials So, think on guidance Specialty specialty not standpoint, actions, thinking when terms the taking the our we're about we're specifically projects the about you how an And that and and gross they that on look impact operating our we

Wendell Weeks

is you that, out, should good scaling the when this of what that you play think of incremental the I delta model, Steve, investment about bulk pretty think and [delta] a innovation. our in have And

as to like, the goes you right it of innovations, car]. know, opposed as what I it, right. that here but cycle can away, it's So, you to think it that you know. as how we coming [boxed progressing, We're don't if you as with surprises know think make you've often quickly and of got sort just about production what it's you way, And the fast

be humble end should the the in drag. exact So, we of predicting

Steven Fox

Thank That's very Understood. helpful. you.

Operator

Thank you.

question next SIG. Our Mehdi with from comes Hosseini

Your open. line is

Mehdi Hosseini

refill is, have I under are my and market, strong are the I'm that for the And your like year? next for to the to Thanks I'm the asking because in channel? demand And TV how had to second know that channel, the thanks will detail. want impression for to panels we'd want comment Tony, glass question. in assumption just refill half. the we I What I'm channel impact the curious that that about what taking to the ask go back and key given you this year your

Tony Tripeny

really in the the we of what any size least difference And the number, trend over pointed know, Mehdi the given seeing. to into in is, what channels, matters coming know way the know, you in out the know, screen any for time course, I, you about will, halfway quarterly there. as go is year, but half on focused what think end TV is Yeah, consumer and happens what always make you year this really grow you we're know, that's to units a where quarter know, a and demand you longer-term you for we expected and at that, is the down, through inch we're be and

be a size an As look And we'd year, down you to drives row, a on the been the down we and inch World expect And you a is that, just screen units at that growth. up a been know, haven't Cup on. we the line what we to half. expect really two reminder years in haven't in that been be year. back previously growth the trend TV next And, know, had

we what selling then season, So, have do need through we'll get insights we big more the and once actually to is do that.

Mehdi Hosseini

you. Thank it. Got

Operator

you. Thank

Hall next Sachs. Goldman with comes Rod Our from question

open. Your line is

Rod Hall

to that I'm that I seeing temporarily just question. inputs for play? wanted fitting how still months? talking short-term likely other call – the let's is commodity whether to it's to the think And over a next say input do impact thanks just ongoing resin, whether you you do are I is year, guess, you wondering think Hi, next, guys Thanks. in think about curious theme Tony, Yeah. how inflation in. an that is, model or you the come inflation that me XX this back we'll you be kind of

Tony Tripeny

quarter are in shipping to and expect just, we'd material biggest [indiscernible] saw freight, areas, saw the other So, know, the raw you seeing in the but, we we some like second and areas one that you know, in in do shipping that really freight that. We resins? areas, You it's we in continue. the know and improvement think quarter, second you the know, was

do You that to is an was, into know, I know, next so, have We was be We third out that you and it we fought prudent actions mitigating to several the to believe think certainly will know, how think the you our it's assumption to you in, going that's this quarters. predict. you there guidance is think know, over will, normalize this is our based continue play know, hard the impact. going quarter. on It exactly it

worried about longer-term, but not So, about nearer-term, I'm concerned I'm certainly it. in the the it in more

Wendell Weeks

anybody So exact know exact Rod, I it's being think And don't who answer now. answer know right says an question. excellent probably do prideful. the we And they think the I is

Okay.

things action, also pressures are, way of that the that take [more So, is you chain begin we to pressures share And some to we pricing account to for it supply to an actions, because why our that see inflationary which us on feel. could mitigation we shipping standpoint. to arise don't say, we're That's our from why yet look equitably] and approaching sued]. those going we're the that that's guide, [we're we know

will well, we'll think cost around burden on you, sure mitigation structures, more to with what shareholders. make – the better think, those happens but we're of that make things all unfairly here learn our quarters. a then to us what give are around cost of able coming be sure view don't our doing plans right as those And do, pricing, to I as the point in I will we much

Rod Hall

Great.

you. Okay. Thank

Operator

you. Thank

Samik a Our Chatterjee next with from comes question JPMorgan.

open. line Your is

Samik Chatterjee

data. for self-correcting what talked the, to you're of Thanks and about had and one I recovering more you extent. kind I know of probably retail color the about morning. on question. some my kind TV good retail Tony, I in taking display guess Hi, for seeing previously thanks segment. China

get market? kind seeing display to while. data relative then it's reported highest wanted And to been the that the that of you're retail for you a in margins Just as is XX.X what

primary we the is given of the in that kind about of you're Thank improvement be So, couple quarters, getting that think, you. of increases the thinking driver should as margins? price display we next about that

Tony Tripeny

about standpoint, we mean, online, and before and investments build build operating doing what display. lot margin come about, So, happened think clearly performance. I you as seeing talked we've is, when investments display I you're Wendell And been in that's know, have what from you we've has a know, talked a outstanding as of those really

operating pricing standpoint. helping, performance is but sure, what's an from happening it For is the also really

of China before. where been actually exactly terms In the it was markets of kind

change see of if there. monitoring much We you it obviously a And, changes. to haven't seen really something closely know, we're

Samik Chatterjee

Thank you. Great.

Ann Nicholson

Next question.

Operator

comes question Company. Yang Oppenheimer next & Our from with Martin

Your line open. is

Martin Yang

taking us context the well are on you everyone. and able not fit camera, question. Good around process? the And maybe whether more Glass camera Thank be opportunity a Gorilla be fairly market Can new your can morning, to far supply give chain, product? smartphone how the cover manufacturing pretty seems feedback big into adopt to The for the you to the solution for seems solution quickly. existing so the or customer

Wendell Weeks

Martin. Thanks

as this quite We’re about excited well. opportunity

part. So, calling cover thanks that chain works way for a provide it The part, literally is, will the out. we supply

to well the cameras. we able be of use the and to the optics durability as improve So, the to composite material underlying drive glass structure, as those both the structures,

that ultimately we've roll the to glass to to, phones. So, into, build to supply be same plants built parts chain able have the that go really

we the built serve have capability we market. that feel capability to the pretty So, the we’ve good that

now technology feature improve a is it how will significantly. does phones. be, the new will And pretty new, darn be performance is so it quickly for adopted? Because It camera it

that's light the pretty that complex right. change we're camera. though Remember is, of So, you impact capabilities when cameras pretty thing that going rapidly devices, hoping that are a adopted. One to becomes capturing pacing

deal whole available. that's around built to with and amount an lens that of chipsets optical is they're light a and have different have system, So, the that chain imaging, you you certain

So, improving that. actually we're

need to of that advantage some improve full components. you optimize take as you so, it, And probably other to

think do it to things to and experience. is we advantage of So, though there advantage you differently full to an deliver need are do would customer easily adoptable, that take that this relatively

Martin Yang

That's really helpful. Thank you.

Ann Nicholson

Next question.

Operator

Shannon with Research. Cross Cross from Comes

open. is line Your

Shannon Cross

a I much. big picture very you have Thank question.

in we of Just kind of you know, During this this terms word, projects is maintain, have the of, just investments from know over on four from, about know, XXXX, ROIC undertaken investing an script, you're the so I my you've you you to and years? a in, thinking don't should a say benefit ones sort of where noted made harvesting in last right XXXX that you can over XX%, build how done few to to case continued us sort the some how that, you're you but the get know, mode know, you've think growth, the about rate? those, you've what the in of of I'm the you've done, of four are you years, now in yielding to similar you understand, growth you. blocks building the revenue trying years. past given Thank future strong

Tony Tripeny

question. a Shannon, So, that's great

growth capital the to from capital our going is, that that that, continue lot say putting of I in right comes you we've now growth really you made to you place businesses. would years know, of we'd grow we extend in to addition last build our expect from how The capital. right investments to in focus know, we’ve on we're thing our now the And the is, extend that and the the know, a And going extended And capital couple of got extend support a that's forward. we're continue first call we what lot now capital. our is experiencing right

You we at know, capital. when markets. point, I'm better And that gives see and that out us be there, customer really know, our perform at Corning some do you at opportunities build sure you and a to with will more we commitments, the underlying we'll the much innovation than know, do that, chance that And we looking back including, real you model know, given trends, financing. our

invested is way it's this know, we our businesses. it's improved you our efficiencies, think business to a return shareholder a from model run our know, this run great you think to our standpoint, with, capitals. on And, is I capital really improved So, a great

Shannon Cross

you. thank Great,

Ann Nicholson

take more we question Let's one close. before

Operator

Meta from comes with Stanley. And Marshall Okay. that Morgan

is line open. Your

Meta Marshall

question, mentioned, guys mentioned, following of last the constraints optical side, up you you've kind Maybe Wendell, know, on of know, thanks. Great, you the also you ROIC. on kind increased

product pretty the know, lower a of been consider increase do remainder You investments You've the but kind on, during of CapEx so up, you we period, that flow for picks of we should CapEx, the what year? as to generation Thanks. reserved just step-up availability. rightfully, some of cash kind know, for

Tony Tripeny

going it's is, capital know, think the You know, year year. our as since to of been is same what the this you underlying spending beginning the view roughly I be on

going than growth. little to a know, strong what going projected. know, knew maybe you originally we year, a You were year good faster have a we bit, It's with we

bit more than higher maybe bit would original in but original So, be than maybe did but will a lot our XXXX, similar our pretty than projections, what to little little capital go up that, we it'll be outlook a not a higher that.

Meta Marshall

thanks. Great,

Ann Nicholson

everybody, joining Thanks, for us. right. All Great.

Before we the close, XX. that know and you to September be we're Jefferies Conference September Virtual on I X; to let wanted Citi the on Conference going attending Virtual

replay thank joining of Once a you site call this us, again, our find morning. Katherine, can and disconnect you can lines. later You for on all starting today's

Operator

for Thank you today's concludes call. conference participating. This you. Thank

You may now disconnect.

Corning (GLW) 27 Jul 212021 Q2 Earnings call transcript