GLW - Earnings call transcript Q2 2022

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Operator

Welcome to the Corning Incorporated Quarter Two 2022 Earnings Call. [Operator Instructions] It is my pleasure to introduce to you, Ann Nicholson, Vice President of Investor Relations.

Ann Nicholson

Thank you and good morning, everybody. Welcome to Corning’s Q2 2022 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; Ed Schlesinger, 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

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

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

and can increased quarter, core gains mark-to-market $XXX of the second For in the Investor be noncash flow. company's between has GAAP QX accounting website be on stems impact Relations largest A section this mark-to-market of core our corning.com. results the associated the reconciliation to currency our difference from hedging cash GAAP by the with value found clear, To contracts. results million. at in This no GAAP earnings comparable

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

Wendell Weeks

basis was the Free XX levels. cash flow expanded margin year-over-year. year-over-year. Sales and operating announced flow Ann, Gross $X.X X% from million. an environment. additional morning, good first $XXX and you, points Today, second were X% delivered And $XXX and total on markets, basis everyone. we captured optical respectively And Thank XXXX results. solar. quarter EPS $X.XX, was billion, half extremely in We content XXX we was and our and across cash external million quarter opportunities strong despite challenging demand growing first free up up points margin

total, took our the three was utilization in profitability sales in said of In played we share in more last guidance. profitability. month improved largest industry stemming appropriately XXXX. delivered with as the XX% levels the the we to with delivered out continued second the demonstrated we we at our expectations, dynamics impact Shanghai to and outstanding strategy these year-over-year. trends the solar. benefit In same our challenges now quarter grow reflected we working. and our to we ongoing third quarter, that in consistent be is point from the At including face a strong going were COVID guidance. to Both factors primarily continued line three third smartphone declined the markets growth time, from year-over-year, do sequentially an We roughly lockdowns We expect view secular and resilience did continue. our these quarter, to In height optical virtually China. assumptions. we primarily we've results, We June are In lowest dynamics, the sales expect expect of what proof benefits in lowest below COVID-XX maker financial Auto end in in sold no restrictions of the new improved production were though of that even normal with In to the our with our of European quarter, driven customers. inflation quarter panel we XXXX, lower cars for rates with in line the pricing the the actions of April, by Now first to when at crisis. markets our the significantly of since levels car registrations of declined the at since due and in

a $XX expect to exceed X% sales to full of in to slightly billion year grow We X%. and range

more just a Ed in Now, will moment. elaborate

I'll communications, we're driving in is expand consumer and path four to on want address billion financials reflected electronics. it mobile solar, market: experiencing, I look we're what the mind, our in to that at And how and critical $XX in optical dynamics our playing with Now out our display, how performance. and

with start display. Let's

our sharpest We Panel against was the market. maker makers well quarter. you executing maker reductions utilization accelerated in in utilization The year a been in We now. second the the reduction had volume and updating correction are panel with on June for panel strategy. our line declined and

low entire third to the level quarter decline to, continue market. with volume We expect the and line June's throughout production again, our in

Our panel second the price time, expect our half. to we third we stability up expected, to sequentially. was That And we expect the the of price maintain said, second what always second happened lower is through view have than expect quarter. be quarter the to half production. price exactly half this quarter, makers’ correction. consistent guidance same our reflects second first with And volume At in we as be

makers panel thereby and to glass are repairs perform maintenance lower idle utilization, seeing lower and tanks makers we As capacity. their

We and for are flat very, to demand repairs our supply running tank our own after a restarts align time. to long managing very out

continue in As remain to a glass to of strength. a result, from display, we We in and strategy and expect balance. we about demand our supply operate as good position execution feel

long-term the are leadership manufacturing XX.X, positioned with industry size leader capabilities and cost global to advantages, large Gen in well TVs. We are growth capture footprint, distinctive in we where a

the We've our We're passive category got Let's significant to a each the we're in this to well the for multi-year cloud. growth of build beginning growth. largest XG, that networks. seeing believe programs the we're major move wave to is industry optical second with optical see three large quarter We growth. you and underway business innovation and can of positioned for capture secular communications, Momentum pursuing customers. our and in to contributor our this at which financials. was continues robust trends: broadband, traction And

sequentially, XX% innovations. systems to grew market third cloud Take, faster the expect operators. again demand year-over-year sales quarter pre-engineered and even to full we the for growing due quarter our than grow and year-over-year year billion in for our faster reach XX% $X.X for the and edge for to expected than example, we Second

of solution and hardware broadband FlexNAP a customers cables, to-date speed. like greener biggest These this simple product Now with number had for trays The quarter provide its simpler prop quarter. the is cable the minimize needed. second much in value solutions to

get installed much bottlenecks capacity in helping the eliminating We’re labor faster, industry.

at fraction reduces at on the manufacturing much a process, and dramatically cost Our which of labor. site quality, splicing completes higher innovative

customer’s we’re build more scale all our their market. to the cloud So capacity networks solutions driving Corning while accelerating ability and into

of is and the and Our network well winning high in visibility now. deployment edge planning are because adoption of we products confidence decisions happen ahead

global behavior Turning our to rapidly to simply We solar suggests grew reflected is that than significantly, capacity renewable participation the industry In take top economic trends. growth more imperative in tied the polysilicon. recently evolving line sales solar. which our closely long-term The is through re-energized energy a and the commitments growth. and customer solar or quarter, current in ongoing our turning market is on new securing idle contracts by for pay grade market’s

that Corning’s the our manufacturing believe four, we capabilities ahead, relevant and broader and our industry. three will prove technical Looking helping advance in highly

growth to in business. smartphone see and half sales were in retail excellent potential growth continue mobile year-over-year second In consumer electronics, down. we the expect We this and IT unit

outperforming grew were our strategy material market more The Corning with results. product ongoing net we’re a this are income XX% benefits in of quarter our collaboration sales of and Specialty approach, XXXX strong consistent second leadership with our evident true However, through in year-over-year. and industry leaders.

executing market delivered customers the in the temporary Despite this We very our product commercially half challenges, down we innovations a expect adopt all deliver technically. to back well as to macro growth Corning more their launches. for $X.XX in and solid sales is time of million And same quarter. first more has faster, in $X.XX. the We’ve added reflecting than half, in year-over-year. than from grown period an the $XXX XX% even in XX% increase EPS Overall, up

and and in growth you So strong our automotive the solar consumer offsetting can markets. optical approach electronics see that is and Corning more in secular mobile display, weakness

strong close environment in a We another performing expect year. to out continue well challenging to

record future. focus leading us years, changing playing with automotive life the the Stepping ongoing The and us in that XXX saving resilience of well markets portfolio life are consumer for smart of serve the and life XX and in inception cohesive current provides back, Our long been track for we’ve mobile for of and basis of strategic XX display devices. will set since telecommunications a in and well electronics science distinctive our capabilities environment out successes is years, inventions. the and

in We’ve building company. and great Now resilient made a balanced progress, important times present. this like the particularly more is

We are downturn side. Corning’s our on content consistently. drive to over ability our deep our to stronger with our the along outperforming economic time other maintain markets on and more us markets structured through trends, to relevance focused and emerge this enable to into secular will strength

drive future we portfolio cohesive and with investments help look immediate confident our discipline will multi-year and our to durable, our financial that both profitable and longer-term, the As focused together growth. us we’re

us drive a And distinguished transformation. engine period up never of R&D to exciting through stepped has stronger. our leaders fact, our In new of has generation next been

contributions like Glass. the Chief Jaymin the of launching year veteran customers only on, Technology we Officer. A month of our PhD to work strong some Jaymin and next technology take accomplished I’d company’s and after commercializing retired and my including advancements, to He influential adding level will quarter, will last confidence over come. Amin Corning his Corning’s technical with XX as MIT was has David nearly foundation leadership, ground innovative to This Jaymin’s thank and yet experience I a leaders. old help contributions us breaking expertise most Dr. leadership and Morse. his appointed appreciate when XX to greatest Gorilla years years has years David with scientific his deeply most he capabilities XX innovation. with Corning on are of also worked continue the as Jaymin our received the build from company. he one to created that that

and call details who results, on Now, more let turn outlook. our share Ed, the to financial will over priorities me

Ed Schlesinger

everyone. today key Good with my three preface remarks on Thank you, Wendell. quarter. morning, the like takeaways I’d to

well successfully environment. executing current We’re the and navigating

for sales cash with the and We’re and flow disciplined approach through we’re employing driving said, investing growth, highly EPS that growth. With sales digit improved profitability strong let’s cash toward a line the And long-term. details than walk $X.X growth growth single top year-over-year high We met and company in goal highlights included EPS margin, generated driven and was the of improving X% operating strong basis in invested Total sales margin solar. we operating XX% optical in generation of sequentially gross more X% billion, nearly growing reached points. our and year-over-year, year-over-year margin announced quarter. We the on of margin XXX the $X.XX, free of also grew strong the an which currency. up across I’d by the CapEx. X% points in like million million, and for comment $XXX and Gross of another actions increase pace on $XXX $XXX company XX was year income represents Net keeping impact quarter, flow cash year-over-year. million on to previously grew organization. basis pricing

effective tool protect an currency reduce ability We returns. hedged foreign invest enhanced provide our to exposure decade. earnings flow, past actively volatility, This to and as our the have over serves shareholder cash

Our largest weakening. end, exposure been is has which to the

to expect We of hedged and in rate have most we our next same XXXX. the remain year core

our with program of certainty additional received quarter. automotive market pleased inflation higher solar. navigated I’m and in with $X and billion and teams temporary a for more in We with COVID-XX their since correction We’re to prices the display on the capitalizing operational China our pleased market, an our We in hedging Overall, China, We’ve more extended strong it and sharp leadership economic displayed hedge customers. the our raised secular utilization optical contracts rigor And maker down lower appropriately growth during in share our lockdowns successfully than in impact inception. cash under demand successfully provides. the the we’re step panel production. in smartphones

reflect results quarter the it provides. balance Second and our particularly portfolio, focused cohesive benefits of the

XX% We the primarily by the go build Net multiple was the passive billion for year-over-year, segments. through was sales let’s in sales market. and by up Year-over-year phases cloud. reaching multi-year the growth a income second early segments increases. million, volume Optical $XXX broadband, of XX% strong optical grew the and driven in driven In Now cycle Communications, price across XG, year-over-year, we’re believe quarter. $X.X

from by investments the May. were this always April up production for line ramping production In demand meaningful and quarter, our as to a X% In with sequentially. the utilization we June, commitments $XXX opening responding Technologies beginning panel customers the and we this in before decline facilities construction. few in de-risk million, often We’re and funding saw Panel have including down makers maker quarters. market. requiring rates Display these been by second reducing new volume And versus their declined change significant last sales

expect decline. lower solid our June’s the mid Importantly, to low quarter, sales sequentially. coupled continue, line X% price up In decline glass teens the net down was half than with resulting income average production in slightly utilization in This sequentially, market levels less sequentially. execution and third with our panel the we glass volume to declining resulted volume and maker in

price be favorable The glass the pricing environment quarter third assess support a with consistent in expect to pricing glass use we display We the environment. to quarter. the to second market factors continue

Currently, tightness. First an is makers balance. and taking glass glass repairs glass for supply offline tanks demand after of extended period maintenance are

actively are restarts to repairs align lower supply in demand. We the actions to managing our market. tank in and result glass These capacity

profitability glass Additionally, during inventory reduce And have favorable profitability excess who flat environment for toward inflationary need makers fixed after glass high pricing. so logistics periods we In out to lastly, this for our costs running costs. volume. low optimal it to long, also levels maintain challenging of maker replenish is to supports

us on market our us on depend to for enabling build competitive customers our leading our reliability, strong supply Additionally, position.

feel against stable. stabilize in our pricing execution environment returns to we goal Display. overall, our about The good So is

and up We We XX% profitability In year-over-year. smartphone returns, sales quarter IT our results will markets being these down. Net XXXX. were consistent strong achieved Specialty sales maintained second $XX have and improve. pricing our the despite million, volume when with a was income Materials, and

ongoing Our leadership Corning collaboration market. this industry more outperformance and approach, in are leaders enabling our product with

of Specifically, we cover profitability the and materials. by our driven maintained adoption revenue premium

to equipment the industry. of continue benefit also We the from semiconductor strength

prepared lockdowns In in capture New York the driven expect shortages, In production growth. optics rapidly of operations supply war, quarter ensure we expect Technologies, half as Materials growing and Environmental Specialty due auto to chip industry state. just mentioned, And to investments to advanced growth prolonged launches. second to increased to support COVID-XX we the fact, chain China. are announced Russia-Ukraine in expansion continued stability we We an constraints demand meet the experienced customer in Wendell back in and sales product our by in see to the

a $XXX were result, meet Since our both In market markets X% second and the a in sequentially were will quarter XX%. this production been As has over row have year-over-year. be automotive have same to outperformed contrast, end and XX% auto In period. the sales declined sales around XXXX, up million, the unable about we year down the demand. industry, third market

GPS demand new We’re such pursuing regions. as content opportunities end beyond additional that adoption of generate market sales in

year-over-year COVID a quarter supply uptick income increases. In resumption third We production in in consistent prepared down. Life and We Sciences, for million expect remain $XX the offset in million sales an sequentially sales demand research was and and bioproduction lockdowns. in related serve production of auto growth driven globally primarily products to net by of following of and products. COVID $XXX China auto by was demand remain Lower as constraints ease

sales and COVID Additionally, impacted China in profitability. lockdowns

support and with to Looking ahead, better continued growth demand we us improve customers. we’re global expect efficiency to in bioproduction, and that research meet positioned see recent investments and designed to to capacity enable well

businesses, Finally, sequentially. strong an production meet million, was $XXX XX% our largely This a and in take-or-pay XX% to Hemlock driven long-term solar contracts. reached sales by increase and increase Emerging year-over-year, new performance ramp Growth

quarter, Technologies to the growth strong Solutions sales our we critical solutions Corning drugs. adoption contributed as And packaging Pharmaceutical saw During year-over-year of continued Automotive for well. as pharmaceutical delivered Glass also

portfolio Gorilla as consistently the markets. $XXX our our Glass proof a quarter, inherent of us multiple and one Corning outperform market During enables for AutoGrade the Year” resiliency progress sum, across that an Continental toward growth point our the opportunity. the In of create our on to car drivers its leadership business “Suppliers our recognized another per technology,

our to outlook. Now turning

range third the second sales of with the billion billion. in $X.XX quarter the $X.XX roughly consistent we to expect quarter, For

Communications, in products, as continued earlier. volume, mid-teens is strong quarter sales Materials expect from Specialty down offset to be Hemlock’s to lower We display solar and I Optical which expected noted second the

We expect $X.XX quarter. $X.XX range to for of EPS third in the the

will volume impact While the of in we lower display our benefits expect pricing actions continue to profitability. the

Our we sales X%, grow billion you sales $XX X% shared full to in with up now most year to for as the and expect with we in likely in We line be to to EPS exceed sales. April. is slightly outcome expect

probabilities challenges in range for factors market morning. we’ve of guidance Our outlined that the a this

up my end the quarter results and of remarks wrap with we’re half I’ll first by the very today, I saying, year. As of pleased the the

and highly evolving in growing This And disciplined remain decisions, maintaining market free our we us and We’re while conditions. sheet flexibility profitably. address balance delivering strong to ability approach solid the flow. gives investment a to cash

expanding committed environment support also appropriately. all to the monitoring customer to We’re while demand capacity pace carefully external

at long-term disposal out that, confident Q&A. our stronger, come our turn We’re to while over the levers any side the I’ll initiatives. and to other environment Ann manage With back through it in many growth for advancing

Ann Nicholson

the ready Krystal, Ed. Thanks, first we’re for question.

Operator

[Operator will you. Advisors. Steven open. Fox Thank come And your Fox from from line now question first And Instructions] is our

Steven Fox

Hi. hear Good morning. me? Good you morning. Can

Ann Nicholson

Yes, please, Steve.

Steven Fox

you and Hi. if I talk go optical extremely new business bit has lot got had little wondering can the guess, back a It’s I of was and growth. strong obviously momentum more. product a about

your its carrier consumer pressures, next face quarters, the weakness of some and how say grow? of do think we we called ability about not next the of recently think Some confident How the other on in to but out macro continue it customers for subscribers year Thanks. optical couple about for are maybe to demand. just you if in sort have

Wendell Weeks

all the customers. Thanks of question, those course we’ve all and Steve. our talk of leadership major comments to we carrier seen of for Yes, directly

just we’re it. some of step behind macro other just the Here’s about the back forces then what are let’s hearing. what And talk and

priority. So is is top in their them hearing from investment optics strategic what their we’re fiber

in with they’re asking us actually look investment their their next investment and they’re a to product take sets. plans capital And of spending our at to prioritizing what different into they as can even commit and elements supply more that that beyond. year do so plans their And they

of in type we’re So midst of customers. the our with that discussion

little will where will turn tell out, but a that a So gets that all as public exactly to little bit early be closer.

quite we make now signals would be cable, so. next fiber strong that and we demand into and I as continued if we’re more our seeing more sell demand Did question, year and we Steven? continue could or of and say to So right all your robust cable, answer fiber look could

Steven Fox

that And you then And from did. into have the cloud is, probably on I’ll it pass demand It could well? about which there. expand should Thanks. as I this to just thrown maybe talk just question, Wendell

Wendell Weeks

pretty they they in as I’m cloud, In continue the some And sure to see in general, performance put a revenue where strong like them. would those little infrastructure behind bit have cloud, you major pandemic programs seen. of

continuing volatility to that’s cloud That’s get tends in any robust. to done get demand time also construction labor thing the see tremendously actually labor. they to to we’re the So plays very actually innovations need demand And all get based providing into their very there. main be on actually some their of our less The ability installations going. to nicely that new use it our that

one up that’s take we’re of cloud. in our strong innovations new seeing of reasons so And the

customers although go we’re So sort seeing construction our projects. a strong signal cloud but is their out – can of will Overall, there. how always demand run of with nothing they

Steven Fox

helpful. Great. you. That’s very Thank

Ann Nicholson

question? Next

Operator

you. Thank

Bank comes will is question And Wamsi Mohan America. next now open. Our of line from your with

Wamsi Mohan

growth on XXXX look of initial Yes. glass assumption are XXXX. your at or if about so happening significant basis was Thank you have given at at panel decline at you can for much. profitability, could we Specialty you the I update talk around in point, flat if on units sequential year-on-year and Thank makers? you retail And was you. roughly on this profitability. both improvement TV a into Materials what’s you for I there? look us maybe I expecting wondering And a or wondering drivers And if could that or if revenues,

Wendell Weeks

makers Display, taking we where in as are down heard to and quarter are in you be utilization some with – On volume opening, their would’ve line three. our XX% in our panel we expect

especially panel and us shutdowns. retail see market is then flat. look unit our just way a real this to But price critical down what pretty up, year. have to we comes expect say And be maker for has position stay us as next in a profitability correction at to continue And it’s be As stable, stable. our This our we’ll our I we’d and we’d working for year units significant be think that happened about we with have want it be climb given now, too China probably spot for what our television through could we’ll able is be the line. we’re TV utilization that early is the to and execute there strategy to take demand talk

Ed Schlesinger

I’ll your Wamsi Specialty question, And on take Materials. second

down first we’re for one, segment, market right? performing things, story couple It’s more Corning a in So I well us. and we’re great think, flattish. this is The

flat we’re primarily content relative the then continued adoption the the there. what’s secondly, And think market So the the sales. That’s about profitability cover us into materials the driving it’s profitability I and market. on to outperforming side, new our adding of really

Wamsi Mohan

Okay. Thank you much. so

Ann Nicholson

question? Next

Operator

Thank our your JPMorgan. come question is from open. line you. Samik now from next will And And Chatterjee

Samik Chatterjee

what’s for just the recovery going Hi, assume driver segment you’re expectation curious guide represent you. I driving from you. XQ thank just from given my to levels. to the to earnings of to XQ question. rebounds here. of And does XQ for about the Display that question was the Yes. itself, the sort on Thank earnings my And I’m what’s you’re that from I as guide and the implied contribute expecting that embedding. in just hence a XQ Display the guess XQ that, increase The would taking XQ Thanks relevance well?

Wendell Weeks

Thanks, Samik.

there as across all June. we our markets. seeing sharp the was Display, probability guide, if can down the talked reflect about full do think of in and highest to we’ve it’s tried both sort the of – And third maybe dynamics what correction a bit a think I year, range back the I we’re the little that So quarter stepping about on for all is we in pretty

half we into related automotive the third how back that holds the demand expecting to range we impacts thing obviously end out. the have of to of guide, right? quarter, about a continue probable view low playing and of of true our our most think year. outcome. and which even but if a Life China, We’re a impact the a there’s in end see So sort smartphones maybe It’ll same potentially And Sciences, you that high and then in

And so, out quarter within certainly yes, that expecting the for a we’re sort where possible third quarter, if fourth pick things bit the be quarter better normally probably play third you on the it’s to depending do. than little of range as we’ve given you they and

You would terms we’ve of see That’s in range an uptick of in about Display. definitely how in thought it. the probabilities

Samik Chatterjee

Thank you.

Operator

come next our And from And your line Hall Sachs. Goldman Rod you. is Thank open. now question will from

Rod Hall

I’ll consumer, you consumer year follow for then And in hanging any the higher is after what back think of at there? the end question are there that that the exposure the and that a wanted of evidence higher low a is Wendell, solar in question end see a for question deterioration high up the with Wendell, your consumer the expectations I’m the you not and it’s the seen you in on if your we’ve to okay. answer, wondering start I or I end well, if questions. some et what Yes. the just, then with as industry, little end as Thank maybe have well. for cetera. bit, level solar mid-range still of I do smartphone

Wendell Weeks

a relative been going in a [Ph] you not but is and going concerned in still that’s it’s Is We that observation were guide, look and premium question. the more be end that the agree doing timing will that you’ll relative insightful question it. belief observation with Rod, of has way and Rod? there, just think low the everybody’s your We I and outperformance think we that premium we be like right. better in at end deterioration would that asking we’re But bimodal, the largest than the piece our get have reflecting impacted to the the don’t outperformance market. to it’s end

Rod Hall

Yes.

data Whether just a opinion curious I low of do? end that more whether high of but that think just will, it was lot end, you we did have course or the was thought curious was I probably you I follow think see I than to sometimes what would your so?

Wendell Weeks

Yes.

would this impact be of think by that really combination primarily driven, We’re where shutdowns we it of the inflation. China below I being thought and seeing would’ve

what would below we still is, expected outperformance seeing we run. be, it’s normally So to have it are it but

Rod Hall

Right.

right just make? is that if turn to able how revenues all sell on In other you you supply. a year. of might And Wendell. then And last now? supply, maybe year? were look can what Thanks you like a and Could Okay. the Talk kind words, little of more with had just Ed more if is we gated on that for you bit Business everything of revenue us how Emerging estimated total solar wondering solar, about are that click curious Wendell, Hemlock solar Growth selling you. you double third could this year. about curious And Thank the on I'm think up I'm for or by even proportion this also you guys those shaping

Wendell Weeks

Rod. Thanks Yes.

So on through solar, fourth is out solar the up last of I we the year, about in all into production quarter originally to were then sold of to of it we year, think and started and ramp quarter. continued the think sort inventory that sales. we year sort selling way this out back of second We and our the

Hemlock a the become Growth of it segment. in Emerging has part sales so And greater and

a mean, lot capacity addition not for a In And to little make we as that, customers [Technical capacity. making about we to I little back of for say but get would a multi-year we I take and to a back the into what but the and selling we'll the make, can constrained. thing have we'll in we're into to think have most capacity getting a better better signed be capacity we've important half out the at to and part, think capacity. And as and XXXX, go that think I Difficulty] more capacity. pay sell is, we are important we'll we'll contracts XXXX, or go what is, little I think the more little not thing in up half a get at making essentially lot of

feel ability demand it. to that and we good So about our really supply

We volume or have the continue more make It market dynamics customers the that to would we long-term signing take a either turn commitments. we'd could for up ability and be that have in on by our get on. decision to cash based us to capacity giving to

Rod Hall

prices just But only you going make Would demand seem they – would it one way. is to, with that? where to with go solar I it wouldn't energy agree sense are,

Wendell Weeks

supply It Difficulty] to take that continue on. ability be signing on to commitments. that to volume in up it, based or the we the turn for our [Technical capacity a customers to and make market either decision could dynamics by would we'd more us giving cash have long-term to we have get

Rod Hall

going But it one solar I way. wouldn't only demand with Would they make energy go agree seem to, sense it that? is where to just – with are, would you prices

Wendell Weeks

is think agree. I the Yes, high. do good – demand I the

we for of itself want that we update on. make XXXX. got plays good into half and that I the think you any space We'll to and demand would in in sure commitment turn we're cautious we've as that year this back out this additional

Ed Schlesinger

geopolitics take for us more customers that and demand really shareholders your instincts that sure that add are to make are insist a there, ours on their What some role. right, bold makes our a than Rod, of have you customers under is from Just the risk solar. also I because think on our would plays case taking committed

different solar on and want – sure has is if so and a geopolitics we capacity add if role we shot play free no basically that our getting is that given always why energy we shareholders to a goal. that, make on So nice more bring are

Rod Hall

Thanks guys. color. the a appreciate lot, great. all That's I

Operator

Spector, line question Mr. Thank from make line you. now And your Josh mute. from open. is your Spector UBS. please And not is come our next will sure on

Josh Spector

Sorry.

reason for it I my Thanks name. hear out. some cut For taking my didn't question.

unchanged, significantly? second roughly changed those would term bullish growth those the few level, trying moved In relatively a as Thanks. ago months relative you your Maybe display you portfolio, mean, on to some optical. the a saw clearly you well? expectations expectations Just relatively bit. things half high have segments say of rest I that are the are curious, about expectations in similar as Or for terms medium think how to and of they to longer a seem of

Wendell Weeks

auto were And We market I end the were totality. one maybe And changes. there, change Yes. And supply in any the second of impacted in than respect of the probably lot in of of us. I what quarter. the that in therefore, expectations a would but the other happens general, there back impacted back think optical. significant market a all see And at say going little in for expecting higher auto, world I'd the of half, board our lower our quarter that, is across both in ago. the demand and is think is of a part the aren't we constrained. significantly. but I biggest a in our a beginning Other the the year, that in China, markets happened we that it's is industry range in to is in think how it That market demand chain obviously thing I with than than sort that say, would the they still what is China are of lockdowns constrained and view China, the that quarter part, add

Josh Spector

you. thank Okay,

Ed Schlesinger

say all And well are up of as sort have the big is the of us There's quite as continue. trends, these the to we now takes, puts we're the and I'd challenging well, to in but content range trends strategy. like lot would strategy expect quite the we our our for capacity that to ability up now capacity. other Corning sell that's placed a would've And we to we more that And would've push we thought, quarter sort macro and moving environment. to even that There's driven that investing looks secular behind into that mega year. are up a – our around will efficacy holding things that in do we with it of little the our are good about maybe year. in of this behind some bets bring growth of about we're available had next where feeling Optical, on running and that total,

Ann Nicholson

question? Next

Operator

your we'll SIG. Hosseini And from And Mehdi you. question Thank from take our next now open. line is

Mehdi Hosseini

Yes. taking question. my Thanks for

shouldn't me panel improve want the your Now, costs material elastic, are to you to like get your Unless to produce glass market market thoughts Why process glass. thoughts lowering key panel, display here any affordability up. great. follow enable customers And have cost. go back is lower especially and ability costs that be to a cash the the want the since tell on not would I by and

Wendell Weeks

good a it's Well, question.

makers to panel our the ability cost is of main production Our panel structure making. overall cost innovations dramatically contribution lower to of the

panels TVs For at preceded Gen than instance, large that lower for a a cost manufacture can the Gen X.X roughly size XX% XX.X facility it.

those so also on that requires require a And for investment. deliver innovations and type to of us us we invest to return

that is glass our is And cost us buy best Delta that make add to sir. help be help we believe the plenty significant them. innovate life is manufacturers would successful low can expect wise, set end but and who to panel can reliable can the a their that than turn And pricing, way we gets activate productivity, do as help So going to that improve and great prices better to fact they consumers to overall we Price we way in continue in already quite and to more in for a that that downstream we already for are sensitive nothing continue the and market elasticity suppliers of total. be television price elasticity, them to flow re-represented cost to are help very customers. their

Mehdi Hosseini

for that days half second Got trend And on inventories the you. cash inventory the up of I it. follow-up would down Q-o-Q Should just flow into and quick that XXX of detail. are assume Thank year-over-year. Thanks calendar year?

Ed Schlesinger

Yes. to about. think Hi Mehdi, I think a things couple

First, our chain we it's to want supply make environment. a sure supply customers. difficult We can

hard have more eventually normal, probably might we than call that. That to a inventory on timing the to we otherwise have. will So back go little

of if the impacts, our them inflationary mostly about we inventory, I is, they right. about context think in sit thing talk think and see you the in P&L, we also second the

higher So produce. you have and raw material costs to higher costs

related And dollars so as some see, of the higher is you higher balance to well. inflation sheet, the

passed Now along form price. of in that gets the

is on So that carrying sheet. a same, you're more bit of your the little profitability the balance but

Mehdi Hosseini

Thank it. you. Got

Ann Nicholson

question? Next

Operator

Oppenheimer. from And Martin our from you. will question come next Yang Thank

Your line now open. is

Martin Yang

good Hi, my you question. for Thank morning. taking

consistent mix bit So can you part past more a excluding the to a for new for materials? specialty maybe give exposure or specialty Have two either materials, advanced material. insight in us premier into observed products of more increase of semiconductor especially the customers you years

Wendell Weeks

Yes.

people you buy. dynamic, content-driven been phones, It a the markets in but think buying the identified content people Corning consumer electronics already that is account our smart number mobile correctly just Martin. not sort stuff, I into our more strategy put has like more on devices is to of buying more of

we've more therefore to that our of add have each down to more some revenues it why tends And basically smartphone those grown XX% that's to innovations market, or is content flat to strategy. so it's new despite content. value And our and

Martin Yang

Got it.

the a can release a, will more but products in I regular you on into carry two support trend? to think say of that to, We couple a view, a, the of next schedule past. there looking of let's products do see this new are in sort point years,

Wendell Weeks

lined new We strong interest have in innovations and a that good we’re adoption – have of. we seeing that we up yes,

out So, to continue see able be yes, we to years play to the in come. strategy that successfully

same will innovation, a customers happen launch our that and all plans like. macroeconomic right? all technology that adoption context, that new broader Now impact time, at of the does of the in So how

remain fundamental would is be structure the place. think the strategy seen. in of to But I

Martin Yang

Got it. much. very you Thank

Operator

Thank you. from question We’ll Niknam from Deutsche next Matt Bank. take our

Your make now your on sure you’re line open. is line not now Niknam, mute. is Mr. open please

Matt Niknam

Hi.

Sorry, Thanks you the out it question. my I out. of were had the calling taking name when cut same for

may still X% mentioned So growth Ed, at in XXXX the and it’s you’ve past, conference. CAGR XXXX. a talked between to I somewhat industry recent And X% have about you relevant think

events, share of we any curious recent just then operating light and could just updated of macro updates guide? maybe can a leverage. expectations you see terms I’m on follow-up quick in And when long-term in broadly more So any an

just think that outpacing trends anything some shift maybe by we’re display quarter terms in growth, a about top that operating I’m entirely mix to is else EPS lacking or Thanks. line bit. consider talked leverage. the of I of on wondering maybe It last side? margin you maybe like looks that

Ed Schlesinger

questions. the for Thanks Yes.

panel give external for challenges guidance we think in XXXX the the environment. articulated we about on we’re Wendell not on point call. certainly that guide all the I right our So, happening very market despite following sort But some going we’ll update year our I the gave a the intact utilization earlier, as think on a year this I the display. said primarily of all going Volume secular the side, operating longer-term. about what’s to we’re in side, At and leverage significant It’s and and is dynamic really sure the growth volume perhaps maker you new our just think the you And feel the going now, sales of long-term down because down, good for impact and is driver zone. primary environment. then are – just long-term, them over this on profitability. trends we current And going down challenging

the primary real this the earnings year. that’s So driver per side share on

Matt Niknam

And going in actions you pricing the get the margin, know that you forward? I the for Is as of talked benefit positive still past, about the had trough. being gross XQ case

Ed Schlesinger

Yes.

the was did quarter for trough. We believe the that first say right. and we You’re still, sure,

still those although X continue And the results, stepped our really all with the we’ll in actions us, in is great point saw had about. quarter. you feel pricing That’s As we about We raise environment the actions. to second up about we inflationary talked price. about

march And favorable be a that would environment. I should a be that just margins. a time, of caution will this it in so tailwind period slow to over

Matt Niknam

Perfect. Thank you.

Ann Nicholson

Great.

Next question.

Operator

Thank you. And from Citi. Merchant question our take we’ll next from Asiya

Your open. is line

Asiya Merchant

before Great. calls. between it’s Thank you been as I a couple for of if asked the was question. switching Apologize

down from about hyperscalers share can CapEx some operators. anything you telco that the side, hearing Just you’re some about demand hyperscalers versus optical been rumblings the the on We’ve investments. the stepping seeing

any And that so you. on share great. color you be can that Thank if would

Wendell Weeks

carrier them both. happened to continue to we public highly well has policy Without that catch having with everything in been that’s by demand doubt to as everything as sort stimulated So demand see of going pandemic. up on the from both

with that demand we safety sword cloud both they pretty both preservation all XX%. hyperscalers while and period, revenue their constrained. CapEx went and the were carriers up XX%, during broadband about lowered actually the for during some just into spend And time pandemic by some like As up two-thirds cash XX%, pandemic, maybe use terms,

about of demand. all months in them XX ahead of least demands. to volatility want their take have the in to They of build of at able to tend customer’s Now to supply, place be bandwidth

and we through we that to that. sort of So have re-establish went

in of look them, all ahead, sort felt have we as they pull see So well that of strong growth. as they

are green. flashing things still general, So in

can at where off range aimed, in which that makes we we’re megawatts hyperscalers we think many sense of you. megawatt and get different that of projections, have a how stronger but will right, on their to some You’re have if all back certain of them, pretty much the in they times

Asiya Merchant

you. Thank Okay.

Ann Nicholson

Great.

question. Next

Operator

Thank you.

question Long is next from Timothy to going Barclays. from Our come

Your line now is open.

Timothy Long

Thank you.

bit that bit you were behind over bit kind little kind have a a the just increases It’s one a timeline talk on but flat I leverage. Thank need cadence we increases secondly, of higher little we being you. then business something some that can. few Just of good leverage – with Is just sales. a mentioned there do and two-parter the sequentially there, next operating adding ASPs. last some higher helped there the Could few us next business give continues margins you over about, little can that capacity see back leverage quarter, maybe And on where and well you expect as optical if a comms to on more to quarters? unfold just to with there you One, could capacity quarters margin that very be. seen to capacity QX that the of

Ed Schlesinger

Yes.

So thanks, Tim.

adding been we’ve talking it’s capacity capacity, year. on primarily this about capacity cable So fiber and

significantly in more heard probably months or some bit six relative so capacity We and as coming ago, us to And half a we of more quarter little that have a Wendell on fourth say, in the in the you a versus behind, three, had first strong Optical has you’re will in quarter that We products happens XXXX. a operating think and have mix the where of that we leverage, lot the our on helped sell exactly a really quarter capacity did have quarter maybe the right. the on And a in the we connectivity so a we’re side of help little third second thought, businesses to be I quarter. inflation. of and of little quarter. what XXXX one

up – normalize you in will us as and it but that should I have environment. continue can that slow margins well. that, a expect again, be caution to them prices to slowly just raised successfully has And think kind and of march you helped up see there march We this our continue there

Timothy Long

Okay. Thank you.

Ann Nicholson

got for We question. time one more

Operator

final from Meta Stanley. question we’ll And our from you. Thank Marshall take Morgan

Your line now is open.

Meta Marshall

evaluating for in change be plans. Maybe would guys’ at the any your macro build that comment Thanks. you Great. to end

a then further couple to like, business kind build wanted being of even verify, have changed maybe or on guys rollouts. you Just within the kind gating XXXX, And labor noted guys of kind for that’s of segments. if any you for the of plans moving item question, yet optical kind second times

or a kind sense even there? is Thanks. get comes place are the still get it to into really need come labor to are to of supply that further other there when elements to cloud, of, of chain there wanting it just build activity – Just

Wendell Weeks

take first one. the we’ll go detailed then me more the second one. And Let into

at due back the operating holding first in wouldn’t is instance, to that level, What in we’ve making the characterize doing investments display. first for been we are So I one, like on macro. our the sure

and like you’re one we to just that as In up similar passive we half, need would we ramps we we construction it pick where little in ability good can things up supply cable, our so just we successfully sell new And have of the opportunity to work, we you a customer’s we we at if we supply way we our restart going have demand clarity nice see. next in cable you year. opto, and we’re like times, that bit and need we’ll We’re keep there demand some on And and for in as make every those work, we case ramps And do feel financial a and chains about it in take substantial And opto, you In until to opto, meet these and really that them. now tanks when way way demand. to capacity simply we won’t could the down optical aimed such we’ll networks. taking from from if connectivity, fiber customer’s where connectivity, about pretty or in enough more. just we the In be some putting connectivity balance. have investment, other. have need them commitment that was first think customer we significant more, packages. committed that behind fiber, a the could And technology brought ask our repair build that feather the our brought in on because in

offer that an that sharing shareholders. build of we therefore the they would to with continue type So to and of with extent appropriate them to risk our commitment expect

the – on then one I issue quite sort the out installations, specific to more sort in. path. tightly to one hypers or of odd your of whether you’re this this without right remains it’s ourselves in remains of point in we you in That say, critical the moment, in that the all So it’s the At tightest question, labor would pieces time, that’s in situation for And move top of economic find question macro. same carriers.

to You to move bottleneck one another from another.

able resolve if labor, So we else. I’m quite sure you’re there’d were something to right, be

Meta Marshall

the Thanks. Great. answer. Appreciate

Ann Nicholson

for Thanks, want Meta. thank I Thanks, us this Wendell. to morning. joining And you all

on September Communacopia Sachs Xth Global know & attend that to Before we XXth. going close, Technology Goldman Conference Citi’s on you Conference and let Technology September we’re I’ll

call. the disconnect morning. later select hosting everybody with replay this over investors of some A for joining Please available visits that be we’ll cities call today’s starting Operator our concludes in lines. site all will web our Thanks Additionally, us. quarter. be on

Operator

concludes conference This call. Thank today’s your participation. Thank for you. you

You may day. great have Everyone, now disconnect. a

Corning (GLW) 26 Jul 222022 Q2 Earnings call transcript