GLW - Earnings call transcript Q4 2021

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Operator

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

Ann Nicholson

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

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

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

contracts core and the the non-cash gains With though periods accounting For will the debt fourth currency hedge quarter, company’s respect the quarter, GAAP even be settling largest those non-cash stem translation current foreign and end each to associated mark-to-market quarter. future results the in impairment with settled at differences at recorded requires contracts not in and of earnings GAAP hedging and between mark-to-market current contracts adjustments, be charges. mark-to-market to from value our

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

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

aligned non-GAAP underlying the our into by economics transactions. Our operations using constant provide results with currency rates or core transparency additional of

the and hedging provides. pleased it very are We our certainty program with economic

section more of X contracts our in can website corning.com. to billion comparable core years found GAAP Investor since $X.X at ago. than their under cash more Relations reconciliation the received our in have be the of value results A hedge than inception We

encourage you our on to may will now, slides to on I Supporting website call available And in We downloadable are turn They shown our are Interactive live being Wendell. results along. access core financials the with also You Analyst webcast. also our website downloading. on the Center. for follow over

Wendell Weeks

Thank quarter and results. year growth. strong you, reported another quarter We Ann Today, we XXXX year-over-year of good everyone. and fourth morning full delivered

sales For EPS year-over-year. and $XXX were million. XX% We cash quarter, billion, generated flow fourth free of $X.X up $X.XX the of

For billion, XX% XX% the We up nearly EPS $X.XX, year-over-year doubled year, full free and sales we were flow. up $XX.X year-over-year. cash of generated

margin the shares dividend leveraging of and opportunities In increased achieved operating are more compelling resumption by addition, strategy, through across capabilities we We expanded and short X% we ROIC. and capturing by a share basis by X% of repurchases. double-digit Corning outstanding our portfolio. set our our reduced our We points. fundamental By our XXX long-term we our

year. momentum the performing we challenging well environment and a are have entering We in

of our simply all Now should where it that be. not is gross margin said,

As it have in people protecting a our at and we cost. delivering come and said environment has customers quarter, throughout last our complex prioritized inflationary the a pandemic, for we

the increased we long-term to share experiencing. we to negotiated cost prices increase months, customers several in last more our the Over are contracts have appropriately with

We be first our Last year. on the Display are display will pricing throughout in discuss momentum strength. expected our we positive quarter, our expectations intend focus overall for sales and environment enhance how Ed on to hear as and revenues This flat to and tight. results I tight of you we in plan as gross sequentially our priorities discussed to that for our XXXX, quarter. and display glass business. glass financial The well maintain demand supply supply another quarter is and is favorable. expanding our morning, other to we and in expect XXXX for am our report pricing pleased strong four. and to these growth balanced margin profits more improvement our hold Tony overall balance remain had quarter actions focused growth our In take we our the price expect also glass will on to display XXXX, remain the to and profitability as

So let’s dive in.

XX% been cohesive growth. with up delivering our across by Everything we consistent have begins been grown six Sales quarters sales XX%, a XXXX, consistent have and contributions row. balanced with more portfolio. our We have in for Since EPS businesses. by and

we among leader applying with synergies We four and science, ceramic optical create strategy physics capabilities focus on glass proprietary our our in world to and and platforms. them science We are along innovations. manufacturing these most capabilities to with capturing the engineering the of disruptive toughest leading we their help the bring Across move to on bear our and closely work companies world forward. In many world influential the industries, challenges. multiple successful process,

value and powerful advance repurpose provides As our new probability This reapply existing of by visions, assets. combine into to increases lever we partner a we integrate their our customers with capabilities, our ecosystems. our creation unlocking customers’ ways of to as content talent more our our success

relying buying stuff. more exclusively on aren’t We people

are driving are content buying. Corning into We more already the products they

to and XX% broadband and as in strong and the creation access. Our places in applications are it we’ve deployments people expect reach is our returned access Operators on to and XXXX. growth, continue. approach pace world In data and more governments to viewed the is the progress with more illustrates building network growth are are effectiveness XXXX gives accelerating a around Meanwhile, human the more strong we for a right. that network of we underway. initiating in as center increasingly to capacity, move data sales to soar as continues foundation of additional construction expanding fiber-rich to Optical The in us up of wireless XXXX cloud confidence growth plans extend Communications, are capability

For broadband $XX builds. in billion infrastructure, Infrastructure allocates including spending new passed recently U.S. for billion example, the network new $XX bill for

for networks. preferences their build stating fiber to are customers Our these

vital manufacturer plays expansion continued As solutions, connectivity. the driving the role scale end-to-end large only of in a of Corning optical

working we beginning could fronts, sales over believe are for years. the investments add in with momentum double-digit infrastructure up U.S. back, multiyear as push as public starting much In as is infrastructure are more We national a carrier $X the our XXXX. billion for industry Life next XX% years, a growth out, to are the large as with XXXX. as Sciences, and our even into We players will Stepping expanding strong with across optical Project long-time on multiple and base. delivering it And wave few passive X roll plans customer market networks. AT&T. at including regional growth closely at the the growth year levels, of collaboration of we market early private

support We are demand response. seeing in ongoing a global pandemic of

advance vials. These we pharmaceutical packaging to to introducing in industry cell Glass increase Velocity end-to-end of throughput industry drive making we therapies. global our joins business. recently helping the progress manufacturing Our to build are vials packaging Valor meet tubing inventions Valor also leading are help demand. in are and on efficiency vials a our and faster XXXX, drug multibillion After vaccines business as makers comprehensive portfolio. glass and And our opportunity helping pharmaceutical transition gene-based Velocity introduced dollar the we content

leader so doses In packaging to Environmental injectable reach market In in in XX% high chip sales shortages. of supply Corning vaccines a fact, billion in delivery Technologies drug enabled agreement related week, technology our and this increased nearly portfolio long-term despite has announced the weakness West $X.X And injectable X earlier far. a investment COVID-XX the Pharmaceutical enhance an in administration, of drug global segment XXXX to to systems. automotive, all-time billion automotive our Services,

our the mirror that Jeep with technical head-up This announced product our momentum, solutions. factory Daimler the opportunity features X. in innovation content And now are curved car is proof is augmented Mercedes-Benz that display Building per category XXXX. the on dashboard reshaping Wrangler display and entered their installed we $XXX and Jeep parts on electric performance a Gorilla the car. re-imagining a automotive Gorilla driven in reality a EQS. delivered pursuing into multiple iconic the by The brings option auto featuring are enabling Hyundai’s Hyperscreen new Gladiator. vehicles. wide. feet display new glass industry nearly Glass The the X a IONIQ windshield the We cover trends crossover, a We in tough points launched this Glass product

tighter continue to regulations emissions solutions. a Additionally, provide environmental strong opportunity for our content

in particulate helped including contributions action. while of our Corning gasoline Environmental filters of even XX%. more of hybrids, fine provide vehicles have more by decreased XX%, of illustration generation levels global emissions. strategy newest than tailpipe XXXX, Technologies have increased Since achieve a business strong lower our sales car Our The particulate sales GPF

materials billion we a $X.X down. has in Consumer where XXXX Let’s million increased a Electronics, $XXX that Since the XXXX nearly time. been in specialty has turn the Mobile base surpassed smartphone for to first flat $X sales X% to market added of billion on and sales

deliver customers their our deployed to help in we is new great our more action. of device illustration another That in sold. As of is each content users, value Corning more

leading to accolades. garner continued widespread industry Our innovations

“virtually Glass named world’s yet. category Shield, indestructible” color-free Gorilla innovative most close recognizing the Victus touting the Corning company glass SaaS for Glass fact, and as XXXX the in In Gorilla the electronics company toughest ceramic as consumer first Ceramic and transparent

new we laptops, category both to Glass. for to devices, continue launched composite attractive expanded XXX premium optimize DX create than These and including products revenue of opportunity and products. device. smartphones, per tablets We by introducing capabilities more Gorilla Gorilla see into with DX+ cameras. XXXX, our phone demand mobile these our And a increase to In strong wearables, an Glass featuring

million Finally, $XXX has in $XX total Manufacturing from Fund. million in Corning an Advanced fund. Corning Apple’s from XXXX, additional its Apple awarded To-date, received

and XXXX are consumer in excited we investing the inventions are about and potential beyond. mobile We innovations in electronics for new and multiple

Display, glass sales puts us XX% of Turning XXXX grew $X.X in billion. in a to position strength. our leadership to large

rate glass to tight expect Our at glass ramp environment growth XX.X we remain TVs, compound high-teens years. growth exceeded are supply Gen remain pricing several a next that to facilities market large-sized balanced to which In we expected for as favorable. over volume the overall and XXXX, to annual grow glass supply the

retail believe by clear. We capabilities in role unit markets, and will to our size. drivers grow, are strong progress. growth our lead that in TV vital Across is the screen We higher long-term to led are sales and average continue market growth

world. moving inventions And Our commitment underscores everything approach impact the it world our on positive to make provides the forward opportunities do. that Corning we for in exciting a to

sites to operational $X.X X-year black million kicked a diagnostic And partnership employees the around North more off the Carolina A&T. and university, and provided largest We employees for we In than community with XXXX, Now, than hosted Reynosa, vaccination give historically tests of XXX,XXX members. boosters some you outside more we nation’s me context. Corning world. In for administer doses let XXX,XXX COVID-XX example, clinics of vaccines examples the helped world. at around the we Mexico,

Our to greenhouse world utilizing and goals. address to to members’ its We prepare engaged the finally, students racial careers. for we work I And resilient of align at efforts counsels. solar signed we agreement social will our will company our our and we diverse office contracts to unity, stronger, initiatives. feel renewable bolster more Board resources STEM gas guidance Paris equality very Directors provide of ethnicity energy with to all experience, the with goals office and the Hemlock gender, reach pay about advance this and progress regional company. that of age that salaried expanded committed good We help new equality for DE&I on build our our and continue and we outside to employees sustainability and business globally inside our Overall, achieved a initiative. our the equity gender

are the our We around early exciting industry of are transformations key trends converging innings capabilities. in and

in results. it see our can You

advancement commercial significant it of can new in years. next businesses the You XXXX few sales towards our and outlook see over for

must growing keep Of advancing course, years, our we next to focus leaders. XXX and developing during Corning’s on

company you We are Tony each closely reflects that new thank certainly played growth At phase history I he them. and to Ed a he important future. to into of in generation I during with the and very our and who have excellent the want excited time hand closely a welcome in on with in the he strength this role Ed company. forward to up long very than has we role, exciting have worked decades And few financial and look key stepping to I and in of of the many best am in will To its position. same him to into has of this a guide February I I weeks. time, retirement. working new CFO am end, a position which to to Corning. just The we service prepares make contributions the recognize the three he over starts reins the as are Tony, more strong Ed made you wish XX. the throughout contributions today Tony that to

Ed, let the more our our turn to share call priorities over XXXX. for So, results, outlook on details our who and me Tony and will

Tony Tripeny

Thank everyone. you, morning Wendell and good

and are succeeding excellent year-over-year growth off exceptional growth initiatives year. delivered we a quarter Our another that truly capped of

For was XX%. sales up the XX% year, and full EPS increased

That doubled by $X.X achieved heard and our be. XX% of XX% great. billion, a out our cash by of free gross many quarter, dimensions, for and sales margin margin with we repurchases. you shareholders. X as we to to generation we is a said, X% resumption was we the sales ROIC even a All are cash nearly compared basis it to Wendell, so percentage. which our strong year. have X% We Since gross the by XXX segments In conversion where increasing of to from We pre-pandemic levels. not EPS rate by XX%. fourth flow the feeling We points and utilized sequentially. reduced XX.X%, double-digit dividend is grew was X percentage down should of It share grown XXXX, increased strong shares double-digit our outstanding On our year reward

and sales in materials As normal reduced production expected, profitability. lower seasonally auto below specialty

contracts new restarted cost. polysilicon we addition, startup to In incurring long-term idle support temporary capacity Hemlock’s solar thus

cost year. long-term that pricing percent more experiencing. We customer year. and These the expect throughout higher share effect margin accelerate increases the are appropriately to the gross take We expand we to contracts throughout in increases negotiated

program. last experienced year As expect we to anticipate offset cost reduction what always, on should for cumulative over these and robust of benefits we deliver efforts a XXXX. The we inflation combined the the

margins and benefit will gross growing also from volume. Our operating

volume we and drives Our additional as even incremental more offset profitability becomes such inflation. that operating leverage is apparent good

the We volume expect throughout increases year.

As margin percent our gross will our increase effect, volumes our grow. pricing and actions take

is quarter lowest volume first of quarter the reminder, the a As year. usually our

quarter year. We to with grow expect demand. of to QX the And Materials we’re its we in typically adding cycle, with the happen which chip the to meet Environmental expect shortage, improve later year. of capacity will lowest Optical will as Specialty that the the normal improve on Technologies sales fill resolution the we being growing Communications

volume this gross we there. and growth. we to all year increases cost expect grow margin be price of QX year, reductions For the and for quarter gross the lowest percent together, to Putting margin expect the from

a the Now of and let’s businesses take closer each quarter look our fourth during year. at performance full in the

quarter Let’s Communications. XX%. begin up were to Net income billion. X% Optical increased $X.X with Fourth sales sequentially, exceeding

XX%. increased year, the was broadband $X.X to and than For We income faster the sales XG grew passive on and spending full market. carriers optical regional billion, grew XX% up capital net National significantly projects. and

materials net customers related Full logistics. to and increase grew data year headwinds incremental Additionally, volume enterprise income builds. despite as driven sales were up spending XX% by the center cost on

rate We’re strong book. we where than started order entering we and XXXX have higher with a XX% a in XXXX, sales run

public We to a and infrastructure continue capability as expand multiyear of work fiber wave investments we significant to in access, private and large growth. see expect capacity, and operators

In private investments and will the market fact, believe carrier infrastructure we into push double-digit public growth.

capacity solutions. manufacturer about position and the we growing adding of only good our as demand, end-to-end to We’re feel capture optical the large-scale really

fourth was XX% million, sales year-over-year. $XXX quarter, the up in Turning Display, XX% and net year-over-year income to were up $XXX million,

on year-over-year. allowed year, our was the pricing makers’ panel income to industry In provided continue perspective operational $X.X our up third panel environment on For the year, reached demand, Retail XX% favorable billion, throughout and $XXX sales to excellent about us Display supply detail and main factors: million, up year-over-year. performance to the based full were XX% quarter, Net production the makers ability lead market. glass three we the makers. The

performance quarter first our fourth expectations. reaffirm Our outlook and quarter

and by expect digits, retail growth. in continue driven that single XXXX size to TV We grow at unit high glass by will screen

pricing glass to to first tight. and the balance supply-demand quarter for display glass sequentially flat expect in We display be be

Overall, to glass and favorable. outlook to with about our are balanced remain for in good supply-demand the Display’s performance to very we environment pricing in We expect and feel we XXXX XXXX, remain tight XXXX. pleased

that constraints income declines was and the we sequentially sales began shortage a in In move and and sequentially created quarter Technologies, of We’re semiconductor to lower strength, chip $XX sales build position XX% million, XX% year-over-year million, down auto operating by the we forward. Environmental X% XX% quarter momentum on as production were last on intend These driven year. down year-over-year. Fourth from second fourth were our quarter of volume. $XXX net by

impacted negatively company. profitability the and the As expected, for this segment

Now by nearly diesel by primarily double-digit sales heavy-duty were content-driven enabled adoption for by shortage, were chip able XX% the year strategy. particulate and the to of Full up setback even sales gas caused full year-over-year, we billion, strength with year, $X.X filters. this temporary growth growth, deliver greater our driven in

the $XXX up XX% year-over-year. year, For million, net income full was

approach As expect our the chip confident resolution drive will continue the to rebounds we of ahead, shortage, growth automotive we’re the significant content-driven And look that when outperformance. with current from we market levels.

strong were we the Specialty as to down strong and year-over-year, X% X% coming broader sales for were launch income materials. premium robust remains innovations experience following sales income commercialized as sales that to up, invested normal continues full quarter new Full down being in content in the million, of billion, the year. year be end will was the advanced used year growth. sequentially net market X% Demand sales Sales sales cover $X driven by down strongly continued Despite of $XXX Fourth in optics Ceramic Turning versus driven strong exceeded on down also in seasonality. manufacturing net sequentially lower by Materials, and Shield. semiconductor up was were QX volume. XXXX $XX year-over-year a million,

We that added sales period, a more sales Over through nearly we’ve since approach base billion. unit have grown $XXX XXXX X-year sales Corning in every smartphone our on year maturing. of despite $X.X million

academic the in billion, faster specifically XX% to of And first continuing levels million, and Sciences, $XXX we adoption in sales Full a year-over-year. finally, we year research underlying was were sales quarter demand And quarter. to Life topping performance our than strong strong Looking lithography. by labs turning we ongoing $XX XX% net up in net This grow to vessels as sales seasonal in and from products for driven had total we here, ahead, the consumables. $XXX EUV sales and our expect optics up markets in great for and mentioned expect support driven up continued XXXX, growth quarter year year-over-year. innovations the pandemic up pharmaceutical increase I demand million, to expect with advanced recovery bioproduction Fourth XX% Fourth XX%. $X.X was year-over-year. was by response, income diagnostic-related income million, global low

ahead growth returning strong bioproduction want to funding, to on we segment. XXXX, spend research the vaccine continue, Looking also driven utilization levels segment. expect lab to I our other rollouts, by in growth and to strong pre-pandemic our COVID-XX a minute

As a of are segment Group. other our in reminder, sales the Hemlock Semiconductor majority in

saw the polysilicon. new demand solar-grade for year, During Hemlock

a in customers and polysilicon have solar interest manufacturing. With in increased the manufacturing, activity leader to turned U.S.-based Hemlock,

So polysilicon to inventory. in semiconductors, sell was for solar from able addition to in polysilicon use Hemlock selling

deposits start quarter, that opportunity solar the shift In a signed contracts with for to customer revenue XXXX. we Hemlock. in strong forward, take-or-pay long-term Going fourth supply remains

As we a demand. capital this minimal capacity to restarted result, meet with idle investment

incurred throughout to year As in This quarter solar will the I increases. were gross capacity. improve production fourth cost restart earlier, polysilicon impacted solar as margins the as temporary we mentioned

significantly year industry made are Additionally, in leaders also And sales industry we our segment. and both XXXX. entered well. all new progress the product in with collaboration contributed pharmaceutical advancements. during and businesses grew across packaging the as our strong back, glass to We key announced significant of other categories, businesses Stepping auto businesses emerging

across for We’re to markets. its sustain with leadership commitment and future continues fuel position combined on strong is focus deep growth. Corning’s to This building what foundation our a RD&E innovation consistent and

year-over-year ahead, in the expect first we sales to Corning and quarter. Looking grow EPS

in EPS billion typical due expect of of be We the to seasonal to billion $X.X declines. range volume to range are Sales sales down $X.X in sequentially the $X.XX. $X.XX and to

sales to For full of billion $XX sales. approximately profit grow we the faster year, and expect than

moment things I’d to Before gratitude. I over to express to turn my Ed, a like take

First, this great commitment to and all such company inspiration. employees an dedication whose Corning is to

and journey day to those every team. truly foundation working us. you confidence leadership and Wendell, the I’d fellow in with my of played today. And we’re in trust building of role proud finally, your to thank Corning’s and a Second, all I’m strong has shareholders, for our being, wonderful with It’s maintain on this call your us, members the like to Ed to on Corning have senior a journey. reward being hard been

Ed fully that, this the just and all for Ed. foundation on build takes reins few his over in to I’ll shareholders. a turn confident in our I’m it As value ability weeks, creating With continue to

Ed Schlesinger

the Thanks, on and share you with in and thoughts any ahead may you we and I so to days I’m expand connecting can address have. looking everyone. hello, the forward questions months today Tony,

our working we met in the X-year allocation say Before against of honor I’d framework all in tenure, like strategy Tony years. goals XXXX. strategy been framework. an I that or well we’re the our performing capital And alongside goals growth and subsequent his Under start, exceeded and these we outlined all it’s to today,

as Our unfolded. pandemic created vital a vital execution has proved provided stronger, the that Corning – resilient and more

approach. financial Our I us to growth solid for focus on strength has well Throughout financial in central to results, our and it been preserve kept XXXX. footing sustain that all, stewardship us it enabled and XXXX, to plan disciplined throughout our positioned Tony’s

through work ensure me that I steward an be to my CFO Corning priorities excellent as to let capital. continues as walk So of

generation year priorities another unchanged. in financial strong XXXX, We cash and remain expect our of

growth, continue extend to We of leadership cash support will organic shareholders. and to invest our reward

will our our to growth, previous In we allocation years. for and long-term consistent consistent keep XXXX, primarily RD&E is success through with XXXX. continue First, expect CapEx be fundamental invest we to will RD&E with to and CapEx.

approximately to the productivity. we repurchased on shares we also gross near-term, top priority. priority. dividend we capacity outstanding XXXX. to key opportunistic Our improving adding demand, $X.XX. growing X% repurchases by our returns the investments introduce margin increase in a innovations new include and my to continue share Shareholder remain expect meet share And improve per In expect building of In is XXXX,

expect improvement that sales actions our We our take throughout grow XXXX Overall, excited hold. XXXX into close and optimistic saying as growth and for to step I’ll today trajectory I’m pricing about role. the CFO

a on strong building We’re foundation.

to capabilities serve. are we Our out across relevant major industries trends the playing

sales effectively Our drivers Corning is end our leadership with more executing some Q&A. expanding to on over working. Ann and $XX it morning, even I’ll heard financial EPS position. approach to growing volatile updating back growth XXXX year. turn faster. that, our you we’re with good on extending delivering and markets, expectation look in you’ve I this Based And to to And through relationships customers priorities very the and feel I grow for our our billion the Ann? forward progress about with commitments on throughout

Ann Nicholson

Thanks, Ed.

And Okay. can. as are the as to we Shannon, I many can please ask to try question. folks question, ready one get keep through we it that so we first for

Operator

Instructions] with [Operator Wamsi of comes you. from Bank Our Thank America. question first Mohan

Your line is open.

Wamsi Mohan

contracts? say pricing in bridge And of been versus content you’ve you would negotiating pricing, versus long-term Thank working When And Corning. revenues? you. with how pleasure percent what to market revenue should think contracts comments you. is thanks that you your on about much where us you increase Tony, of the a some you. How It’s investors into is thank $XX Yes, sense for you’re these all for can of tied growth? done give at look your billion

Tony Tripeny

appreciate I Wamsi. you, Thank it.

Wendell Weeks

first. pricing So let’s the with deal question

let’s environment sequential and for remain guide you our pricing out a the received Display which pricing pull in in Display. And that flat you was know expect pricing sequential four, first, what one and well. for guidance favorable. each just to flat happened quarter We glass quarter Display in we provide both quarter pricing So as in moment. every And

expect Sciences, total segments, year-over-year. As you – in of them look take whole, Opto, If dollars up other now auto take MCE. we at let’s Life all a take we be to and as our price

Now those, different. of customers each of different There the you then different And have businesses different types each of within and positions. is contracts. is

So it as whole, expect up. a about statement. I to general analytically, go those it’s we a hard But segments think in as to reach basically, you think prices,

is always a much you that Turning than back $XX should – had the billion, increasing we being our that – friction XXXX. that without allows looking looked at growth sort year the for volume gross the and The inflation our anticipate of well when expect of experienced of reduction any year, will margin as robustness primarily I the That way at that this cost to we what share us, the excess offset that thinking we’ve driven put as more our with normal Tony the more past normal about growth. in to heard think it costs to together for be to us construct by line from by appropriately position with our inflation. if you’ve you with price, as And drop driven inflation higher we’re costs. cost our customers. is a And robust the of input to sort we pricing already sort

about way effect. turns to margin $XX volume the tend we billion. cost think and gross percentage as That’s price, the the think and price So the actions grows how gains then take that’s way into about we it

Wamsi Mohan

Wendell. Thanks,

Ann Nicholson

question? Next

Operator

Barclays. Long Tim from question next Our with

Your open. is line

Tim Long

this the can like in the out looking obviously, business, the to business, ask optical see a to at next strong the growth on wanted started you double-digit Can already think And from pretty renewed benefits you you I you. agreement comms the several talk in little years. with quarter. Thank bit, see you it AT&T? sounds have

over talk a well? Do progression little growth So can get how and Thank they time? you you about you. margins back a margin ago actions see to were levels the higher as think net could pricing bit years you few given

Tony Tripeny

Yes.

all for will for that the just that explained think sure, mean. margins business I to think short the this answer reasons I expand that Wendell is, we in

expect, pricing taking volume here secondly, and it of lot we so obviously, out are that with are a to year. we agreements benefits the see increase through for a you we terms from supply relationship. and combine yes, continue will we long-term when they to that important our the that’s those where First, And are AT&T, then expect in us, increase. roll margins our of customer actions very the And

Tim Long

you. Thank Okay.

Operator

Our Yang Martin with Oppenheimer. next question comes from

open. is line Your

Martin Yang

for Can impact is for margin any maybe this for? Hi. the Thank majority where most price one fully cadence should to be of year? the we and associated about the talk expansion there you question. accounted for taking of expect quarter my increase pricing we their And

Tony Tripeny

Yes. mean – clearly then by we of different going Martin, customers. We I at times out pace to expect mean, it accelerate would expect see and at start it’s to roll QX I in kicking-in What different some happen dynamics it’s then expect our would from we to the is year. we work, how margin increase And expand the when would quarter described QX as there sales you we to have those expect, throughout being standpoint. a from that gross gross margin lowest from add volume there.

Wendell Weeks

in the following the into price, quarter sort amount first think and then applies be to tend normal is it to just seasonal as and more goes the it lowest will volume our as about of year of on, go increased businesses. that cycle our it more of builds as more we way incremental and The cycle-wise, pricing effect contracts

Martin Yang

any at effect lingering increase for price I into is of to the that customers, maybe guess with there get to the XXXX also? potential I trying was is,

Wendell Weeks

I to inflation, It’s when we wrestle deal things out an of question. discussions. There to we have Like things, us the customers rely on and very been favorable learn that they problem, tools. and understanding try with and develop how a other. that our we say mutual been with fair have excellent new would very with many that figure we is good each issue we

We We with And transactional are to be transactional our us. with our real are customers customers. not partners. tend

tends those mean it the we good every last. is news So, that of nature those that time evolve and relationship, long-term to relationships each

will key our But costs, own with forward. going the rigorous excess depends normally is part a to So, fashion I what this we agreed these appropriate inflation, all think share type in reduction we with us. excess more thematic for have it of cost really with do. happens on that they that inflation The

Martin Yang

Got That’s perfectly fair. it. Thank you.

Ann Nicholson

Next question.

Operator

Advisors. question with next Fox Steven from Our Fox comes

is open. Your line

Steven Fox

and Thanks. congrats over retirement, the Really on appreciate years. your Good all help it. thanks your Tony, for morning.

Tony Tripeny

Steve. Thanks

Steven Fox

my In – terms of thanks.

In terms help year. was a bit guess of were this little going materials drivers dig that’s some my specialty could I question, if I like you there into sounded to sales It wondering more. new growth guys

years recent more Just the impact maybe gross maybe the for trying and year? versus the of understand growth Thanks. to coming on then new margins its the typical

Wendell Weeks

especially Thanks, for Steve. comments the Thanks, on Tony.

year you I the terms think just specialty, are margin. when what about inverse of seeing this you in see think of you

investing are We in nature. programs stealth in new that are

they we they what product begin not profit year, start as has the invest we more through introduced, up will revenue, ramp they work gone in therefore, has those gone yet, and in efficient products will And this we are into of through spending stable – to making get are we technology. work our some profit them, XXXX. assets, the and way turn As those investment continuing is gains to as as up, totally to we year-over-year expect will get start way the we but generating production our will

Steven Fox

you Wendell? So, more said, half second a just of type thing

Wendell Weeks

Yes.

think you the consumer as electronics. half be is, tends to mobile more which second typical in know, relatively on I

Steven Fox

Yes. Got you. it. Thank

Ann Nicholson

Great.

Next question.

Operator

from Our John Roberts with next UBS. question comes

open. Your line is

John Roberts

have Since Thanks. include XX%. on is have the well, think only focus focus again, in forward? that met financial And to will Best at the here going an well? we Slide ROIC to and gross and maybe pivoted you maybe spending well outlook have don’t were pivot look ROIC I ROIC You if they on firepower focus capital out, on but as much you that Edward. XX, a on target. laid CFO didn’t are that earlier you going if to Do margin. so we this with as Tony, as wishes goals Corning call, welcome, know wrap

Tony Tripeny

in a XX% challenges that for kind really several both area you But proud when the Sure. significant especially very if is of the in get a actually a measure the it And one I I us. to XXXX, our fact to a of back we for about you pandemic is original to been of talked at of ultimate am back was over clearly above to focus from accomplished level, think the continuing capital and I that last in on ROIC, allocation strategy real which pretty focuses, what you commitment about sure, years, least go that XXXX, think standpoint. which But the mean, profitability expand if framework. look improvement we it it’s ROIC. was specific

priority that financial also a management And from so standpoint. a remains high

Ed Schlesinger

expect have Yes. add, margins, and gave capital that as would and guidance. we John, our we shared you expand I grow, to with you our we

focused are So, as it continue certainly go us ROIC and to important for on be forward. expect to we we

John Roberts

you. Thank

Ann Nicholson

Next question.

Operator

Citi. Our question next with Asiya is from Merchant

open. Your line is

Asiya Merchant

you And help. for Great. opportunity. once all Thank you again, your the for Tony, thank

Tony Tripeny

Thanks.

Asiya Merchant

I pushback I margin. some had this you on question quarter. a quick mean got

there Wendell some mentioned this underwhelming were XQ and as quarter, of pointed being on pressures negotiations was were were inflationary passed well. relative cost understanding Tony which to to think as in negotiated impacted out, I that those being start-up expectations. margins customers costs My

‘XX feel where most the do And why contract? did inflationary you confident abate get on Thank so pushback you in the these that? pressures should with you. that negotiated So,

Wendell Weeks

long-term just driven against drive making up all to who we our wasn’t us a really good what it the the is capital to Really, to did long-term do contracts streams our is product from pushed based. transformation So, comes effect – de-risk we ROIC earnings we these QX, give just and and exactly And to who to thing high and that of value so much into creation key that factories. value investors that wasn’t it. investment. timing these contract by in much of core need question. having it’s so our sure And make have it’s – a goes It us are reason

actually works that So, is put structure on But those to long-term that because the that way cost is effective news you good relatively contracts, inflation to renegotiate down of sit our fixed that inflation downside tends us them. high. and the the with have is some the being dampening of

will we and a be. this reached is them formal So, is on pricing renegotiated what customers confidence with agreement have us what our gives their

what So, execute. it agreement and the then we do But is, is appropriate you that’s time good agreement, to reach we just And takes once news where are. to the sharing. that, you agreement, have now reach

not the everybody. of is to builds we that that’s Now and reason some do, through it There close year. with another more are

Ed Schlesinger

Yes.

regard with thing start-up that costs Asiya actually mentioned, for that that’s Hemlock, to a in Sorry, you the was primarily exciting and us. pretty

As primarily when know, That XXXX, the September it appears looked you from. at have we be semiconductor based we that’s solar option. and an market, and we around of was on where solar in transaction signed to materializing, and as did costs the the long-term came start-up Hemlock, contracts,

Ann Nicholson

Great.

question. Next

Operator

is with question next Our Samik JPMorgan. from Chatterjee

Your line is open.

Samik Chatterjee

TV in a Hi. At you. soft for was points, mean about bearish in I congrats question – industry terms we a saw least I Ed. we XQ. sounded positive Tony, least in you Thanks TV data to and and XQ taking the environment seeing to more at Thank any seemed environment just optimistic the display bit sort on the or XXXX. of of my in Tony here. going ask from data seen retail haven’t

terms about outlook the in of separately, what well. really XXXX? on And looking and terms of are what’s you at driving I screen points mean some unit in driving So, as maybe data the size size much TV that optimism screen increases an maybe Thank recent just inflation-driven aren’t a change in to it Is there sizes? as in used consumer data behavior up back moving you. to. pulling bit screen where consumers higher as of going shows are

Wendell Weeks

an for We from the we stock factor weighing would on in and what the key a that significant the panel concern industry for on price of heard question because our important think current area have is profits profit is cycle display. price it’s thanks investors downward a Well, glass it’s cause squeeze price that really LCD in a – Corning.

quarter believe did was favorable will one, the expect we in be four quarter flat now is price said tight. We pricing what supply-demand a significant have therefore, we glass a not Further, supply in that stream. glass profit data. flat And be remain Now balance Glass glass price tight. demand three that remains the sequentially. environment and for we Once therefore, reduction again, will glass will our quarter sequentially. guided we

think our to are belief core at. So, evidence in evidence will the the now be we that have I a pricing that more That, is favorable support confirmatory environment looking XXXX. we

range retail, we about out year. we market, of size, thinking to the do And to in the quite actually is shift anticipated, like retail in the you expect overall in full coming when what Now, well glass right.

that? the be of and during to things sort of sort which retail. of that expected to screens were a and guys the size smaller to accelerating, more way One tends pandemic of add the place is that the happened lot where drop average. That’s they on to units tend Would off think have, diagonal of the we about anything also on anything, has growth effect have that the the and if sold, we you

Tony Tripeny

in. changed. the standpoint I line pretty mean are year what for from that’s our in think expectations X.X are industry the right. confirms screen the And confident with They X.X the consistent at. mean, feel time. it has in well third-party very looking And I a confident at people exactly I We you very unit are over the No, pretty above we haven’t really year, when been about TVs just size, XX that. a look inch long last for growth inch. period of that very inches

Samik Chatterjee

Thank Okay. you.

Ann Nicholson

question. Next

Operator

with comes next from George question Our Jefferies. Notter

open. is line Your

George Notter

there Obviously, manufacturing I sequentially. the the is you very you capacity. guess think guys business. Thanks can saw expand I much. grew fast I I that just wanted to X.X% about guys. ask bet business, how Hi about obviously, optical

are X high-count we But nearly at hear cables. time, you years fiber your about making for the same are times progress. So, lead how

walk maybe So, there. Is the to capacity what Just items And you to thing, it it resin? could Tony. the expanding draw kind Is through us congrats then see. last you about buildings gating towers? of and talk

Tony Tripeny

Thanks, George.

Wendell Weeks

more, make as customers. our those we commitments line, year could did announced we have our why expect you expansions, each more. in And point And we need if we goes we out, capacity long-term the of I and those expansions last ramp as as And on won’t year. have could on. the specific backlog Like ramping. from we sell to you out, by With but capacity point we that to is that’s comment product those that place

bottleneck is that isn’t real the more to able labor. being isn’t we place us So, It experiencing. appropriately just balanced demand resin, are to into raw capacity isn’t get that the is materials,

Ann Nicholson

Alright.

question. Next

Operator

from question Rod next Hall with comes Our Goldman Sachs.

Your line open. is

Rod Hall

great Thanks you. Tony, fitting of Yes. with Congrats, luck… Best working for me in.

Tony Tripeny

Rod. Thanks,

Rod Hall

was The of mid-single solar, I any I in there So, ‘XX growth one ‘XX, for Do Any you have on Hemlock digits? commentary indication questions, thought could that? for you us ideas on positive. pretty on Hemlock. had two kind give

Ed Schlesinger

specifically of guidance, what upfront, but not have signed received long-term we multiyear Rod, I say we agreements. We cash number agreements. are a would giving their is take-or-pay

have we So, online. we be able will the to we are coming that capacity that highly confident fill

in year you expand will So, the see that through XXXX.

Wendell Weeks

you is sit really business, also as inventory could stood with modeling we semiconductor solar did One had that up all those of solar but from on an Hemlock of picked Ann that is dynamics is capabilities Jeff, we that on the you option really the interesting grade. a from we that, transaction, down with we heard maybe standpoint. When Rod, afterwards with

poly inventory, that through just you the And we being which generated us a are hunk start-up solar cash year, sign so seeing now about. this are really grade new that then by of you talking nicely. down sold made And with

of when modeling, sit worked. help and of a just that have So, down you through – bit to work provide little on how let’s sort the

Rod Hall

same into then buyback be it back Wendell. of Thanks, we are in XXXX. of Should Great. And Okay. is normalized level regime December to kind we the kind thinking of was buyback back a like the now?

Tony Tripeny

very And growth is priority first we our for then we Well, the cash is shareholders. obviously, that, operating buyback approach in to our we strong generate to return a business flow. sustained done invest cash have our Rod, that our sure, and to from And and once first, want leadership. standpoint

increase really basis. shares buybacks. the the opportunity in will pursue dividend Ed expect will have we buy on buybacks we As opportunistic saw the was, where increased dividend be continue to to to an opportunistic price and great QX XXXX. stock And we in a mentioned, and we back as XXXX, we then on And

Rod Hall

Great.

Thank you. lot Okay. Thanks Tony. a

Ann Nicholson

let’s more one question, please. take Shannon,

Operator

question is Our from with Meta last Morgan Stanley. Marshall

Your line is open.

Meta Marshall

and issue on Great. we right are Thanks. question go chain ready a just is now, but that a just an need cars to autos Maybe wanted basically environmental, like I to supply with a get sense just a of clearly, of hear chip. lot

And may environmental the a so see just to Is kind itself expect trying of that would would need Thanks. on tick quarter through auto kind have? you work up? after when it sense to get two inventory of when alleviates to back a shortage of market, of the kind you or supply chain they that or quarters

Wendell Weeks

of a our sort see product. We don’t for overhang significant inventory

our supply our of the our was and to for the demand a strategy that is our ability strain year of content reason with good tight on has amount put that way supply. work through begin we as One to product

we production view scaled, timing. point would you auto back to So, had follow in a when to come roughly auto if general, started of expect for chips and as on that

Meta Marshall

Great. Thank you.

Ann Nicholson

you Alright. joining you. us Thank Thank Great. all for today.

Xth. Conference Telecom Tech Before we Annual SIG on Xth let to Conference the we that close, I Technology, Global on everyone Analyst wanted and will Stanley know Morgan March attend and March Media

management We will investor offices also in visits cities. select host to

of this be today’s later morning. on our web call starting site a will available replay Finally,

So, Shannon, all joining that lines. disconnect for all call. thank Please concludes you us. our

Operator

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

You now disconnect. may

Corning (GLW) 26 Jan 222021 Q4 Earnings call transcript