Earnings call transcript Q2 2023

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Operator

Welcome to the Corning Incorporated Quarter 2 2023 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 second quarter 2023 earnings call.

and Wendell Vice and Officer; President Evenson, Vice are Ed Executive and today Executive Executive Officer. Schlesinger, and President me Weeks, Chief Chairman Officer; Jeff With Strategy Chief Chief Financial

detailed actual like These uncertainties fall the the Reform and that that in Act other remind forward-looking Securities These factors XXXX. cause the within that remarks factors meaning today's I'd reports. contain results to financial statements materially. statements of Private are of to differ Litigation you company's involve could risks,

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

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

from the by restructuring associated increased and mark-to-market second adjustments currency total, debt. the non-cash company's second charges the quarter $XX the GAAP quarter, and primarily For from with contracts between earnings in these In million. difference and hedging core Japanese-yen-denominated core stemmed EPS

cash impact the reminder, value found a As Relations the in comparable website corning.com. the results section can our mark-to-market reconciliation GAAP be at Investor has no of core our to of on flow. accounting A

being webcast. Interactive along. results may financials live the You website slides available on Analyst also shown They're downloading. We our are with Center. for core our on encourage in you Supporting follow downloadable also on access to website our

to call Wendell. And now turn over the I'll

Wendell Weeks

strong progress flow priorities weak morning, Good cash Ann. market current the everyone. Today, to we on you, end demonstrate quarter outlined Thank profitability the second to reported we've in and improve environment. results

flow these a XX.X%, details give increased billion. respectively; Gross on million. Ed the sequentially and will XX.X% few operating improved each $X.X and $XXX $X.XX. margin was EPS of just were to Sales and minutes. in free cash you to margin

financial improvements pandemic of and the Our solid response deliver rippling the significant plan effects still economy. execution on in the after to operational results across to reflect our global

quarters. for discussing plan with been this you we've several Now

we've factors the just let me recap been addressing. So, primary briefly

For costs. higher logistics, freight one, input caused supply and chain disruptions

dollar. Further, grew Additionally, over shifted just-in-time the pandemic last started in our below than from to chains year, demand to hikes goods approach. their U.S. sales. consumers And interest our the majority the in inflation spending the that led as of this rate historic trends abated. normalize to Against drawdown facilitate again supply customers markets to end backdrop, a spike as to transition back in just constitute typical their began vast inventory case, from services

Consequently, highly sales of that a we're portfolio our lower across synchronization seeing is unusual.

the on. do core so Sciences don't technologies sales to optic market Automotive Now this all apply is fundamentally are platforms of isn't and The production. fiber different with move manufacturing and we our in while our deployments the TV three four uncorrelated. with because markets markets, demand serve correlated Life drivers

term revenue outlined noted I've that's quarters, just And flow I several introduced past additional also all near streams. and the taken Over the we to why to rate, while plan a profits both sales cash innovating how profitability have toll improve on longer run and generate current our at comprehensive factors cash. and a

staffing improvement the bringing actions productivity sets delivering our inventory align are and of across I these expect you Display, we require we're will And would plan our levels walk historic our We're to like actions delivering. reduced down the no longer with the to contribute These pricing in we Most and quarter. strong now overall of company, to ratios and supply inventory recently elements the improving. actions. intended through results. taking are because profitability third We've we're the results to demand, levels. buffer chains in we are returning

XXX basis Collectively, margin quarter, by points. another ended we've second the margin XX.X% in to where we quarter, basis by first XXX XXX points improved by the versus And basis In we XXXX. improved gross improved we points. gross

As I the to flow quarter. said million in cash earlier, improved free $XXX our also we

second not into a but As generation going our increase profitability continue half, recovery we strong we're significant the our counting do we and markets in on expect in cash sales, move or up. to our a end

improve Importantly, our markets and actions cash will generation further profitability recover. our when

life. we Our of volume The and to and products sales returns, increase. our broadband. central many smartphones, These facets services TVs, cars, enable are daily

So, historical to will we're confident recover that volume lines. in our trend markets

had In started the the we grew of driven quarter. XX% has by continued volume. than already Improvement utilization we at sales spoke, panel volume Display, believe recovery begun. example, end the to quarter, the we more for first When last sequentially, higher and increase in second makers

this actions third quarter. pricing the profitability When we volume additional in earlier, mentioned to Display we couple I improvement return expect with show the

our goal pre-pandemic exit quarter. Display levels the we to profitability as Now return third is

Let return. to me our rates. run Across turn beyond to our how now we expect our our increase and to demand grow to and normalize intend pre-pandemic our volume profitability sales we markets,

further more markets, our profit we will drive streams. we revenue content increase additional into those Corning we As create as

Now a examples in few More near-term. are innovations that the here arriving of are just exciting Corning

leaders are Communications, which network, a data building individual centers In five data in centers. optical with language is connectivity increasing times models second within Optical essentially by up large what is to

requirements optical designed So, interconnect X, a we're by driven AI. commercializing capture growth to the Gen and system high-value high-density, enable

EPA per industry, to featuring this boost we're for step vehicles, particulate innovations our next filter across And car our year, of to $XXX Electronics, gasoline that business vehicles. the as our a U.S. adoption significantly auto ICE would products expanding technology pursue takes content amount Automotive, commercialized large per is in two vehicles In the now India. has launching domestic content And goal the opportunity. increase Corning We Mobile our content value very recently significant fall in glass of achieving increase we In and we in a regulations that the device. market. to electric in proposed Consumer exterior our that this continue solution

line chain. COX emissions with Vials leader address improving Viridian manufacturing by products efficiency the vial reduces XX%, to filling launched a about in the a by drug glass We're Viridian growing to by accelerate just pharmaceutical the sustainable for our we XX%. West expanding collaboration Sciences, Life adoption. third and all Pharmaceuticals, cuts need packaging from In supply while in

Now sets you just of few a product near-term. can to these are that in expect the see new and examples innovations

Additionally, we're dollars years. scaling our beginning Solar business, millions annual of cash and of expect in flow couple which we add of hundreds profits in a to

create of to additional these increase as We markets. opportunities streams expect revenue our all profits our across we further

cloud built or set a key that trends will secular opportunity Whether next-generation compelling. packaging, broadband, pharmaceutical materials, displays cover material XG, durable and robust our growth. drive We've role it's in semiconductors, reality in automotive, solar, augmented long-term computing, and is

turn through leave So, before of what things significant The I today. is and here's working I'd over pandemic, the like they're with effects trivial after world some not for to company. to Ed, our you

in our on this the Our markets orders count on will from conditions improving environment see we our increase, that's rates. in our or end When current developments And reflect is not the our guidance. significantly guiding and, of sales plans course, quarter. we're order based our second approach in why operating these

to stronger. on Corning throughout executing now, low-volume this to well cash and emerge flow For a and improve comprehensive plan profitability period is

efforts already Our are significant demonstrating results.

and than improved the flow markets Even cash driving in cash create lower the we're is drive as the despite productivity the with streams. revenue More end will and profitability half. we year, our improved At that flow our positioned same first improvement muted to our to significant Corning sales. that Altogether, a to launches In new returns actions of second in product our sales and leverage deliver time, half continue will sales profitability volume markets. pricing approach additional and operating on faster our grow recover levels, will historic environment,

right to progress. further execution. improve look updating improve on our feel We're results taking to In good performance volume our and steps returns. you total, forward our And the we about when I today

so get of I'll the Ed? into call he details Ed, Now, over and the outlook. can to results our turn

Edward Schlesinger

All you, Good right. everyone. morning, Thank Wendell.

overall As flow in and improved demand quarter, environment. profitability cash expected, in the weak second an we

quarter. points progress actions. These $X.XX, margin our improve profitability from margin offset to cash continued from return sales up points -- XX.X%, sequentially. increased to Gross reflecting comprehensive were quarter and basis to flow, actions XX.X% ratios basis by operating on to reduce productivity levels was and sequentially including benefits billion, XXX pricing on productivity Second and EPS approach $X.XX the XXX the to improvement $X.X historical increasing respectively, our to and prior demonstrate productivity and and progress levels inflationary results X% costs, return inventory.

results. segment our to turn let's Now,

expectations. our network you as with orders uptick start shared our Communications. that passive we the Optical at me orders. low-end for the weak. came with typical progressed, not products Near-term seasonal in seeing in back remains the were I demand Let of in And quarter optical May

As year-over-year. second billion, a and X% sequentially result, sales in were $X.XX quarter the XX% down

industry, projects high the are As and I'm into across sure rising rates. inflation and carriers interest enterprise you're operators XXXX to hearing due pushing

now, sizing For plans based our in on our we books. orders are the operational

raised Net more I costs was the as XX% shared productivity quarter. XX% in moderated lower customers. and $XXX this with down income in The decline to by improvements, inflationary year-over-year. sequentially segment price million, volume was first appropriately on We share

computation We've we category. than investments the unconnected optical drivers models are trends a connect share And necessary strongly paradigm optical to in four in passive And and range each larger advantages population. significant language train computation We're got network innovation cloud, longer underway weak, customers intact. trends: public solutions for the large broadband, supported remains While underlying demand much demand economic a other our and the remain infrastructure ever and major bring networks that the to AI. of advanced for broadband XG, by the term, is products secular broader before. of connectivity for private growth industry's and for pursuing by well as shift confident programs offer help the to

up Display primarily in was million, X% Net by higher million, and to up sequentially, XX% XX% income were $XXX $XXX Turning sequentially second Sales driven volume. Technologies. year-over-year. quarter

utilization lows volume significant maker I played We sequential display believe recovery quarter three January, with described in historic line reaching maker as has consistently, After recently out as the ago. panel underway. and is increased industry increases. that Second XXXX the months utilization panel in expectations driving

what me costs. display customers Now update you and understand has we've need Since engaged offset to on in with our then, let elevated May. since our increase price happened our they announcement

begin will third double-digit the We that to for go increases price expect finalize quarter. in effect to into agreements

expect levels profitability to We quarter. the pre-pandemic to as return exit we our improve and

Moving to Specialty Materials.

down increased This continued was X% Gorilla sequentially launches. higher end Sales continued were by market XX% reflects sales income million, impacted product costs Net development on down for new Glass sales. quarter sequentially, softness. year-over-year. Second XX% $XX

for will the that extend devices AI Looking trends our like augmented new ahead, Corning and future. that us far vendable in emerging opportunities are More there into believe innovation we opportunities reality,

optics advanced power for technology. We smaller, our example, our powerful more faster, GPUs EUV accelerating are related in business world-leading materials including For manufacturing optical products. initiatives EUV of GPUs. and systems chips, demand enable and the lithography AI Global our for

sales $XXX In second up our Environmental productivity. sequentially were GPF the sales quarter sales income year-over-year. in In that the ramp by were on expect million and driven Technologies, X% $XXX Net do million, We sales now this effect. and not on GPF up Automotive, in stronger in sales are to China regulations quarter. increased improved China of to X% in XX% sequentially third see based of level

supply XXXX sales and North remained China. shutdowns and China auto heavy-duty sales Automotive diesel, by ramp that up were Auto GPF in for year-over-year, the sales America globally. languishing our driven mentioned demand China COVID by Europe, and in America in in our XXXX XX% issues I more offset North than were in demand In quarter-over-quarter Year-over-year, just driven chain up production versus during automakers levels the XX%, steady which low and Europe.

to Sciences. Life Turning

year-over-year. by sequential and were in inventory. Second from lower improvements $XXX customers to increased products quarter demand and sales more XX% XX% sales for $XX with Both declines drawdown continuing sequentially million lower and year-over-year sales. Net million, income COVID-related offsetting down resulted productivity the to sequentially China than

corrects sales to continue and to restore industry as back as levels. productivity our improve ratios we pre-pandemic We to profitability the and expect

quarter Growth down were year-over-year Sales businesses, consistent Emerging decline first solar-grade were quarter. the and spot prices. sales Finally, with the polysilicon in in in with associated Hemlock $XXX second million a partly XX%

solar-grade polysilicon transparent, We the are And chain the for U.S. income year-over-year, have have need floor supply and in market. solar X% to traceable help a we long-term strong $XX impacts demand for meet take-or-pay in customers mechanisms contracts seeing to that required sustainable driven productivity increased spot our built the million, dynamics. with by Net mitigate of to price improvements. sequentially continued market up

third the spend Now for outlook a on our let quarter. me minute

operations and our based we As we've our with are take on pricing profitability been productivity current continuing to rate. and improve cash flow. you, run we're actions sharing And planning order to

our run in quarter our to rate, philosophy sales Based We're we'll our $X.X know. we current on adopting the expect line Orders roughly come begin guidance. for let approximately with you same billion. in increase, to order X,

flat total flow. sales, cash profitability and roughly improved On company we expect

EPS better to slightly slightly and higher expect or than come We the the and this factors sequentially a rate. quarter, expense tax interest in second about same in higher

are level, by in our the we dynamics China At Of by each lower dynamics and declines high of GPF as largely we for ramp we duty. the expect to Optical as in lower expect demand differing in course, well I for in in offset Specialty mentioned Materials driven previously there Communications, and where as heavy expect Environmental is complete, sales businesses. be improvements a declines Display

expect lower to XXXX capital XXXX. full year be expenditures than to slightly continue We

like takeaways. I'd up few wrap a with Now, key

am As execution on pleased with our CFO, dimensions. many I

results quarter We're levels, second comprehensive inventory. with customers. the our approach we after to are demonstrate We're and track ratios the to of our inflationary on productivity sharing of Our effects costs benefits to pre-pandemic normalize returning address our pandemic.

flow capture markets. enhance our shareholder undertaking to and near-term, second half In cash growth we value remain rate, sales Additionally, and the wave initiatives run at even to on of our opportunities. innovations we're end focused in to profitability next advancing outperform our current the improving

are intact. markets, driven out underlying to the term, to our remain continue expect we and key secular play faster the seeing grow tied expect our across out see capturing approach. markets to we We're it well-positioned growth play More Longer drivers Corning than trends and recovery Display, our in fundamental other because by

progress. So, I our look forward to on updating you

Ann. back turn I'll things Now, to over

Ann Nicholson

Operator, our for first we're Ed. Thanks question. ready

Operator

Thank Instructions] you. [Operator

Our Chatterjee of line first question with comes JPMorgan. from Samik the

now line open. Your is

Samik Chatterjee

guess look weakness more seeing Have as both to by get on maybe my pulled seen I enterprise? XQ you're into Or insights driven is and I and third telcos telcos more? quarter. we've of look being back which -- think in can your sequentially incremental market of the seen Thanks the Hi. for you're a down sort certainly given bit your spending question. taking what at rate optical, guidance if you guiding you

And or of long run? as a part replacement in just whether it's second terms mean, an opportunity this I any discovery for discussions cable well quick you. opportunity what there. the Corning in lead Thank

Edward Schlesinger

I Samik. question. Hi, the appreciate

talked what think So, we as we rates the inflection our uptick saw quarter big we're seeing going in May, were together quarter a we would us the driving an have the little not to we back perspective said a shared relative Normally, bit in playing to I go about to on I out. our When second mostly quarter. quarter. seasonal pretty we first second order second and was how that in the

and at we're down first that guiding quarter by we're orders our came primarily out, be our the order we turned seeing therefore, quarter third thought quarter and that's second to the down than driven in again, it even As what time, in sequentially book. were from actually lower and the

the us to the optical best see that's what market happen versus future. playing in way the think the way out I describe for might we

out you For are the in projects enterprise sure, both industry, seeing hear pushing space, and the it the customers XXXX. as and carrier into we're see in

Samik Chatterjee

an as opportunity? cable the that Any thoughts opportunity, see you lead replacement whether on

Wendell Weeks

about I'll Well, to lead a do add talk both. Ed's the then little briefly and I'll cables.

about out revenue historic use the we demand we're inputs proven we from their be on predict the the our have -- for And in plan. would haven't way I to reliable models approaching that normally way to to in streams not optical as our experiencing we're year build our So, market future customer think able is right think one think a be we plans direct year as what to to quarter like. how

inventory broad the on our to historic in you're shift manner load and what productivity that very which see order seeing reliable improve and our we're going on book, is despite to increase a to is a cash rates we're flow prices our so, really sales we increase carry appropriate going guide to operations philosophy, based our that And plan in lower to volume. our really based so and in our in going operating is going we're and the our profitability what

in really And all guide. seeing our philosophy you're so just operating guide. our our to that's We're carrying forward

is cost, to to the the is, right As side insight issue. it's and make of you the lead would trend is I why lower metric cable further have entirely glass that opportunity. can on is secular the cables, that But offer better, complicated lead every the a it name. ascendant news make inert The good things is really an on or technology problem this all mean environment to the no

Samik Chatterjee

Yeah.

questions. Okay. the taking Thank Thanks for you.

Operator

you. Thank

Our Stanley. next Meta Marshall Morgan from question of the comes line with

Your line is now open.

Meta Marshall

Great. Thanks.

the pricing about negotiations long-term just kind kind all Just how realize should more get agreements? helpful. revenue? to traction be see Thanks. there of not accompanied how this I detail would by done, to of on they're we think terms share pricing You supply impact increases noted there. but being any that those. you're in Is additional Just wanted starting -- I probably of these commentary already

Wendell Weeks

question, for Thanks the Meta.

you're value well-established our businesses on is right? proposition very a the This and and customers. done are backdrop, is price dimensions, we all ourselves our that right between increase agreements. Yet, most complicated significant are the as in I long-term strategy think a on move of redoing

it's complicated. So,

it's So, progressing news the is good well.

offset Our customers elevated understand cost. our to need

share. in execute to expect and a our negatively so does that in a the price third manner double-digit quarter market increase do successfully impact We not

So…

Meta Marshall

Great.

Wendell Weeks

compelling. and significant very hat's

modeling, strategic on in what's the -- the challenge going of in also leaves specialized understand move, like in especially end markets. backdrop I also this Now the

it. return income way been about share how the think think the operating the to think the on top way for of levels is to much about was moment the we've sales revenue to profitability, we past our just And percent high net mid what NPAT to in of net right, -- that to let historic Display So, income year back sales, percent sort we're seeking of we of closer financials XX%. XXs. is The a do me

the Now profitability we to exit that quarter. as of expect hit we level third

that's tend the think to modeling. So about we way the financial

Is Meta? that helpful

Meta Marshall

Thank That's Yes. it. appreciate you. helpful. I

Operator

Thank you.

Asiya of from Our line Citi. with next question comes the Merchant

open. now is line Your

Asiya Merchant

you. Thank Ed. the Great. Wendell Thanks color, and for incremental

Thank returning confidence that guys pre-pandemic sort could terms that more we could of about have that business much the you of is happen XXXX? year as XXXX right any into into you XXXX? your be levels, now? Do think some visibility In maybe the provide you. is back XXXX? based have part how possibly on with it the should to exit customers first how more and that end color segment, helpful. if of XXXX Is it this this we would And by something Or even during into you discussions

Wendell Weeks

I speaking questions your a about broader the company? make or you Can I Are Just answer I specifically. Display so can ask sure question? clarifying

Asiya Merchant

because the exit commentary was with half, talk XXXX. then and we but seems about is as We in could profitability can pre-pandemic weakness confidence Display it more like back a exit about in it well you we of XXXX broader start getting and guys optical see to as of into kind -- you some as levels if what Specialty there

Wendell Weeks

Great. Okay.

some on So, company. total color with Display I'll Ed the let me start have add then and

is, of our So, in that to that is into carry next year return level we And on question QX. would Display? expect to that exit your expect as that we Is to this does continue plan then, pre-pandemic we -- what we'll forward profitability, year. Display, address levels

Asiya Merchant

clear. very That’s

Wendell Weeks

Okay.

Asiya Merchant

Yeah.

Wendell Weeks

the… do speak Ed, to you Good. want

Edward Schlesinger

on I'll build Sure. comments. Yeah. Thanks Asiya. Wendell's

we sort want I start are where in of QX. first, So, with to

If XX.X%. margin made Gross significant of you at gross the we've think up margin about in about we XX%, year. margin operating and at our were margin the operating from move are, where QX at a where end

I from point basis improvement improvement operating quarter. XXX XXX on think and point fourth the from fourth So, the quarter margin basis

to up So, goal our profitability is talked marching as continue march we've up wise. sort to of about,

they're so at lower impacts obviously Now a profitability. our sales are level overall that and muted,

shared across think continue Now of point yes, real improving but the we go levels as our also view, I at for when future. led forward, historical we Display, back expect some us pre-pandemic Display, it is our to all sales by return, then in to for to overall possible Corning, segments. we And get profitability

you So think that's it. kind of way about the

and I fourth specific think and continued quarter. productivity recovery a we've of are, the given pricing effect it and our to actions march upward volume this continue in Display will as take then third and very where seen we

that help? Does

Asiya Merchant

terms the share Yeah. those When to shares, And share at point had from have purchase now. turn payments buyback, I then an end Samsung, come would you now of just on the preferred for -- in what hopefully repurchase? that that you to expect mean

Wendell Weeks

we at. piling more more cash and every up When as aiming we flow quarter start are

So profitability we our that sales about muted to improving see before and at want in capital we first this that's allocation level, model. think our cash flow even deeply

hold our As our in got levels But step heart. these dear that flow is us to pre-pandemic levels. the we've restore always, to profitability our expect at muted to cash and even can shareholders sales near first you and

Asiya Merchant

you. Thank Great.

Operator

Thank you.

line Our SIG. comes the from with Hosseini Mehdi next question of

now open. Your line is

Mehdi Hosseini

have clarification. I'm a for one the Actually, I little margin Yes. my pre-pandemic about Wendell, bit Display talked profile you confused. taking question. business. Thanks for

a pre-pandemic, we exited like for margin it go, XX% XXXX you in prior income back XX%. margin XXXX Display. should given was and And how XX% in with XXXX? far You to year, reference difference the the net When

Edward Schlesinger

Ed. this Mehdi, is He, Yeah.

achieve. So, it of I running is we closer been pre-pandemic seek I XX%, big closer delta So, a right? XX%, to that think about think and the it's to way think to to we've think

XXXX back we depending of more XXXX, end and of half successful front like levels, maybe how earlier than on the XXXX not are. half the even that the of So but maybe

Mehdi Hosseini

increase trying growth significant And then, in Okay. I'm helpful. opportunities revenue highlighted Other polysilicon. Emerging scale Very understand Hemlock how with material and or you CapEx. to without the

year, at in you XXX then significant of without in that prior Should higher doing I last the assume XXX the like and million were you can latter do quarter. to You revenue. closer actually part QX $XXX And did CapEx.

Edward Schlesinger

Yeah. Hey, Mehdi.

that take one also. I'll So,

So, a of couple things.

segment, have that think Corning in Hemlock, Valor and have you Technologies you auto you glass Pharmaceutical reminder, a have or our business Velocity. Just our business,

of grow their all think I will sales. those businesses

very So, Hemlock, currently for will through can some think level that you're to you but In as don't I significant capital us. think definitely we're achievable capacity working this expand is about There of spending, additional the at think be business. thinking so it I we that need point.

Mehdi Hosseini

Okay. Thank you.

Wendell Weeks

I think we're not profit streams to our quite ready expand way Solar. of in yet the to in discuss precise sort we expect which

do So, be provide of some to timing trying much of what able and realize segment fully the rough to in expect more as insight income we're plan, to expanded is footprint. yet the of that idea a you details that to disclosing how value our without that we

Mehdi Hosseini

Sure.

Wendell Weeks

we that rough what in. the -- time, idea will -- But it the answer you given we a we forthcoming more mode here. at -- make we so, we've to are had enough. is think without a provided about financially? is more on how have to So, the we're all So, But I that's think inputs. benefit same that trying the good finalizes be to and out for of stealthy you question it sure this you it Do as to wanted in our come significant

that sense? Does make

Mehdi Hosseini

continued has reason attribute Absolutely. poly. margin your is -- that margin unit to ask And And I business improve. I this profile to the net for

profile much other be margin that sub-segments than fair that is a So, business to poly say better would within unit? it

Wendell Weeks

lot outlined a significant there's going on And we've rolling that think in fundamental a amount to think Solar, are that given out which to you that term here longer right and what in think in of of segment. about you're I capabilities growth a in couple of that way. our because we I the think sort have years, our of is happens it right

concluding from the of of much our think that in the line what exactly being plan is. strategic runs risk more I than -- not you're with sort statement

will and little forthcoming not a future. ask the for be I'd patience, of distant in it So, too bit

Mehdi Hosseini

Okay. much. Thanks so

Operator

Thank you.

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

open. now is line Your

Wamsi Mohan

you down Thank X% morning. Display is X% When year-on-year. was quarter look revenue I the Good at but in up Yes. so profitability much. year-on-year,

for You're answered significant just as an Display questions. expecting prior obviously profit in calling inflection you and improvement, in

would wondering actions was that second how going cost about That's first you benefit say pricing from benefit the part margin how you realized of you your you're much I versus did to And quarter? of the initiatives from improvement, come in So, much actions is as continued think already undertaking. that productivity the of question.

that as sort of of part the say some you agreements based it of you customers? paradigm? you this Display, pricing supersedes prior a this still And new second think Thank is your in the about had improvement with the would that any of old market is like pricing Or paradigm that Is impact? you.

Edward Schlesinger

first, Wamsi. Yeah. I'll your take the first question of part

point taking you're we the are a price the So, is making. action main reason

higher absorbing costs. are We

this elevated business go the about that improvement costs. offset the profitability we most in being price think as significant those And we to costs of driver have I our and expect We as forward.

Wendell Weeks

does So, then, move. a this -- the at mean, a take our prices, think take why I it's if there quarter right? to is and paradigm new about this we increase a great significant industry. results need look It's the I in is agree with to dynamic way what that. into to it, a you that. overall is of little going the Wamsi, time paradigm, to This settle X is our enough, example right to a Wamsi,

players represent paradigm same in supplier. is the us. based on going the It competitors So, this move a of does many our reliable new of most industry, significant this our fundamental be to still for type unlike of are we other principles that

We to business are and going this technology to continue in be maintain be our able the to leader. position

profitability of significant out follow glass glass. industry the of the actually system you'll being challenges space in you in the closely, If here the taken announcements capacity see because

the and new So, the cost are our in both leadership. paradigm advantage paradigm, a out so. we in technology And to it new inherent but core those leader the is is itself reason pricing that this underpin will product business play in the still our advantages reliability,

Wamsi Mohan

understand you to some a So, in I that that. volume the follow up incentive why market historical share market interesting But single that stabilized locking pricing? through really at share at to the on went not years, or low I incremental you display digits you maybe in In mid-teens competitive whether with and ways go which the to think phase that your should largest of back price the decline next would the customers to response did gain down the guys something recovery the a created past, take just could two, through was in if we in obviously an over price where of if three given down. think that trying guys moment. not period we're

Wendell Weeks

Well, our through of our in while long-term increase let our we double-digit love reset we executing a maintain this, this place prices, share And keep after agreements, done in I'd me right? quarter get and now, this to get sit focused down some completed. on it Display right through strategic with But leaders in we're we'll of it you talk through. move and is what let's our and getting maybe talk and bring in

sense, make that Wamsi? Does

Wamsi Mohan

I does. Yeah. Thank you. appreciate response, It the Wendell.

Wendell Weeks

right. All

Ann Nicholson

Wamsi. Thanks

question? Next

Operator

you. Thank

the from comes Suisse. question Cross Credit line with next of Our Shannon

open. now Your line is

Shannon Cross

have very you two. I questions. much Thank my for taking

holding wondering The of that place were looking a I'm follow-up relation in? but in Or on of any there? Is just first, putting in some at weakness the to is carriers given you are it optical. demand there earlier? pricing pricing, just sort softness the seeing what in

benefit rollout thinking on side Wendell, us government as Thank you're poly from give then, on IRA? of broadband how well update you. just about stimulus, the an you some and the timing both of the can the as And

Wendell Weeks

continues hold an to optical. pricing Our

that and the early, news timing as place first there's it's And we plenty the on of you're and is beginning awards there's tech far I to think happening, speak. RIA a though the the right, little states. As to been And of B. see out

to demand I here's start to able that are expect early think our little a you happening, it's when it's see to next year? us call be to for in

Shannon Cross

along Do you you progressing just do see mean, had think or expected? it's -- it you delayed, what I

Wendell Weeks

long a We right, take. started it view, would how with cynical pretty of

to have that But again, until large year, ask. a a really Once people we hasn't really it's program. have It's competing this the out in. not put government right? then federal -- may states, and are not the next we got And and for, do awards that customers very start expected So, those various right they a to to the orders flow is to changed. customers feeling be to from it our

you so, to I'm our I big we a I -- okay? still make Shannon, will always back to is wrong, it start belief thought got And believe then into year. we've double and will until Ed wouldn't next if check, that that get impact

Shannon Cross

Thank much. very Yeah. you

Operator

Thank you.

Our Deutsche comes of with the Bank. line from Matt next question Niknam

now line Your is open.

Matthew Niknam

Hey, thanks for taking the question.

follow-up Just one cash optical, and on well. have on one flow as I

a from tailwind there's messaged On gross some sustained rates the of macro relative a spend the couple are where cash slightly quarters you're was point sort so think side, just digestion higher at flow, Obviously, in I now lull negative a hikes. we the back? to the and half are year. margin optical inventory price that more the on And driving for dynamics being first display of then of

of help this you can half to expectations Thanks. you quarter. for us second and the $XXX how relative the Ed, quarterly maybe, frame year the the So, million posted improvements meaningful if can be

Wendell Weeks

take I'll Ed you first maybe So, take the second. one, the

people telecom buildup various that space was at inventory the serve there yes, was throughout customers. the broadly that really So, all into reported different who the

consumption our sort to at in way sort sort just like our to see yeah, and As in behind to and through think we seasonality feel telecom a models for say, return at the that what it, then our our normal inventory complicated and to enough that question time confident for a point this that back it's half. time of you'll forecasting telecom But it's a of of just in too. customers don't that certainly part seeing moved start the we is, of It's build yes, we're our in than working I normal. is recall, of case going recovery feedback more recovery that and but we're just us, see to inventory, in

on we it's call And fundamental here. drivers that. pops the exact going back, think timing think there's more that's OpCo just difficult and place on why [ph], -- So, it not on to in are I when it's but it we're The planning you fact a down of everything be taking normally you look just was at sort normal Ed cycle. if we're in OpCo order despite why an guide our why sequentially in in the quarter, what's this heard now book and a right would in up operating

we Matt. the about think way that that's So part, tend to

turn to cash to Want Ed? flow,

Edward Schlesinger

Sure. Yes. Matt. Thanks

say things. a flow, would of on couple cash So, I

cash have back to increase We to from flow the to I significant a in operating is relative in cash second QX And our improve as the the we're room operating move did with taking. what flow we we continue to quarter. goal think made you articulated. actions QX, half Our

capital, the we've a in spent on half. bit first And good

to slightly year. year full down last be from our expect We

you a decline half-over-half I spending. also So, think on slight should see capital

the slightly is So, in combination stronger back should what saw less the of second I mean cash think than improving you capital half flow quarter. spending and operating the

meaningful back there's for think a room definitely I room half. So, the -- improvement in

Matthew Niknam

the on in year of anything note at all? half the Just to second working cap

Edward Schlesinger

No. I us I work supply period, during several our about notable goal is talked over inventory a mean, of it the that's last is the we for the amount most significant to we've that disruption chain and down. and thing quarters think built

of good in the think on half we've sales, a lower to news made is I little the bit hard first is which do. progress

away And So, at we're that. continue to that's to I think chipping good. going keep

well. help as So us that should

Matthew Niknam

you. Thank

Operator

you. Thank

from the LLC. question comes Fox Advisors, next Steven with Fox of Our line

Your line open. is now

Steven Fox

morning. good Hey,

just on price question another the display Sorry, increases.

the into volume half So, of increases second the you're seeing year.

put Thanks. just how XXXX housekeeping you bogey then can QX? prices just of you describe and successful isolate in XX%. XXXX? And did last you in release just can said were thing, you one the And press display increasing So, what original the accretion prices out from for margin

Edward Schlesinger

Yes.

I Steve, wasn't it. sure repeat again? part sure So, question just followed XXX% the you of your want to understand. make Can I I I first

Steven Fox

Yeah.

up seems are the going second you're I year. assume half to saying of volumes it also but the signaling. also up, into go are going margins So, display like that's you're what

if that the So, improvement? what on margin is about impact price just we think increases, the

Edward Schlesinger

Yeah. Got it.

I'm we're really the given the low utilization about is half lower the income first was when second think at the really in statement. I costs increase our margin, Certainly, January. that taking driver say, for signaling from it's to think we're quarter, second we in net income levels levels relative relative the not quarter I improvement see back us pricing second predominant panel that offsetting volume absorbing in margin necessarily there. remember, half. maker the sure quarter But And

Steven Fox

QX was and how in what of And terms was? pricing pricing versus successful

Wendell Weeks

what -- Well, we Steve, here expect, QX sorry, is. successful pricing is said how we've that do versus say, I'm again, that

Steven Fox

Yeah.

So, originally…

Wendell Weeks

increase. double-digit we on So, expect close double-digit price -- to a

Steven Fox

price increases. But you said Right. XX% originally,

XX. I'm could So, it, you gotten gauge of to just got whether XX I you part the have full mean trying

Wendell Weeks

So, our price that third guide where it's will end today of Steve, when quarter, more think little I be guide increase. to double-digit today, is the being. double-digit up ended And we it a in our evident get a

Steven Fox

Okay.

to like what sorry And pricing QX was drag -- was but this out, QX like? what pricing

Wendell Weeks

with consistent QX. Relatively

Steven Fox

Thank you Okay. very much.

Operator

Thank you.

with of line Spector next comes Josh the UBS. Our from question

open. now is line Your

Joshua Spector

And comments what could question things centers means here. in of for I of Thanks kind for possible, quantify if at my Yeah. of kind data expand wondering today. your that where are around AI, some and and Corning. if squeezing you just was

some about more efficiency in talked you've So, products.

You versus centers. other AI talked data within data about more transfer

scale? be on that a today? Thanks. of there that base what's opportunity is you So, And again, content thinking could the should we

Wendell Weeks

It revenue center data of number center. models of is lot of the within influence to connections set more the that to of glass within we'd data more A way way a more because same our to opportunity of those combination And new expect of that interconnects a are do fundamentally then this hyperscale required out because the language with than that lot double that and data it going are easiest is amount compute. centers. for happening The innovations center, trained do our is think large just you AI/ML our data to needs about the hyperscale of adding within beyond the content. the

And way think it. so to that's tend about we the

much than remains doubling, how seen How to be successful. on more

diagrams the different variety of be as be wiring to ends able being continue and what final innovations up we Our of to new work a deliver here through package. compute sort this architectures

Joshua Spector

think way you're hyperscale to Is today? what there recognizing your about a revenues,

Wendell Weeks

that helpful question, and of So, that segment, piece and our what to little be a That's what optical that's given a think the scale we'll reflect right is us the is these and Enterprise about let it. to is think right, how in good through changes you do size of way in sizable Josh. how embeds

Let get that, you. reflect us and Ann back on to will

Ann Nicholson

more one please? take We'll you. Operator, Thank question.

Operator

you. Thank

Notter comes Our with of George from last question line the Jefferies.

Your line open. now is

George Notter

had you customers Thanks I in. Hi, on the another the dates and very much, guys. are if I'm future. optical I into out guys squeezing business. to allowing enforcing me just guess, thanks for folks with reschedule or question curious further delivery

about Any market I'm with And the at you're looking sense I'm curious inventory in would fiber. now specifically selling competition seeing just excess if fiber, thinking lot. then more people that for open you? also, Thanks compete in any market gray incremental a And that?

Edward Schlesinger

Yeah.

repeat want back I to just So, question. your George,

delivery into seeing the customers we're that future, out dates if question? to push the their asking You're ask is

George Notter

Correct.

Wendell Weeks

right, complicated I beyond told customers pretty last We're we're has important seeing certainly to need that do, of working to One other. daily. that need executing guided Pull the strong which already not because on happens The it. take it of that civil order it been year, sort year, at us what taking now, this getting then, way and variation normally, a is they're with entire risk. the really what they it's have what And -- what going Well, year. such our part sort like projects. or we don't rates, I plan aheads next between they're because they're to maybe our in what they new you're and we've way an of works

than what play a to fundamental within dates shifting of rather quarter. is more that's through delivery than the think I look here given any So, heartbeat

are telling just for models what happen, plan operating our what and telling is stochastic sort on what book us. to shift based our our opposed It behind as or our it year does is customers order are what the own us we're of as seeing in to

to some be would of that sort be the been not of hearing hearing something, gray sort optical any are hearing first will the optic here. I've if any check if fiber I back because it's we're you're be number. -- play unusual significant but As that seeing cable, significant it It'd about folks, with you

George Notter

Great. it. Got

Thank it, guys. very Okay. much. you I appreciate

Wendell Weeks

Yeah.

Ann Nicholson

Thanks for George, us you, today. and joining everybody thank

and close, we XXXX Before select investor offices visits I we'll be want cities. let Citi's you X, Global Technology we attend that September know hosting will management on in Conference to to

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

you us. can disconnect for all lines. joining you And Once operator, thank all again,

Operator

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

disconnect. now may You

Corning (GLW) 25 Jul 232023 Q2 Earnings call transcript