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The Steuben Courier Advocate
  • Corning Inc.: Sales, profits up in 2013; Q4 mixed on sluggish Gorilla

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  • Corning Inc. posted core sales of $7.95 billion and core earnings per share of $1.23 in 2013, both up from the previous year, the company highlighted Tuesday in its fourth-quarter and full-year report.
    Core sales and earnings were up 5 percent and 16 percent, respectively, over 2012.
    Tuesday's report capped a year in which Corning Inc. increased its dividend by 11 percent and executed more than $1.5 billion in share repurchases.
    The company also took full ownership of its joint venture with Samsung Display in South Korea, which makes LCD glass at several large plants. The acquisition is expected to boost manufacturing capacity and flexibility for Corning, among other "financial and strategic benefits," officials say.
    Overall, management was "very pleased" with 2013, Tony Tripeny, senior vice president and corporate controller, told The Leader on Tuesday.
    Corning Inc. added 2,000 employees to its global work force in 2013, and will soon add another 3,000 due to the acquisition of the joint venture with Samsung Display, said Dan Collins, vice president for corporate communications.
    That will bring the work force to about 34,000 by the end of this quarter, the highest since the telecommunications boom about 15 years ago, when it peaked around 43,000, Collins said.
    About 100 jobs were added locally over the past year, bringing the work force in the greater Corning area to 5,100. The ongoing expansion of the heavy-duty diesel plant in Erwin - targeted for completion in 2015 - is expected to add several hundred more local jobs.
    For Q4, although core sales dipped slightly from Q4 in 2012, core earnings were .29 cents per share, up 4 percent and ahead of Wall Street analysts' estimates.
    There were mixed results across the company's five major business segments. A glance at their Q4 performance, from Tuesday's report:
    • In the largest segment, Display Technologies, core sales were $665 million, down 5 percent year-over-year. Volume remains at record levels, but the business continued to be hurt by moderate price declines for LCD glass.
    • In the newly renamed Optical Communications (formerly Telecommunications), core sales were $605 million, up 12 percent year-over-year. That was driven by carrier network sales in North America, Europe and China, the company says. However, a less profitable sales mix led to an 18 percent drop in core earnings.
    • In Specialty Materials - which includes Gorilla Glass, widely used as cover glass for smartphones and other devices - core sales were $285 million, a 29 percent drop year-over-year, and core earnings were down 42 percent. The company attributed the sharp drop in sales to a buildup in its customers' inventories about a year prior.
    • In Environmental Technologies, sales were $238 million, a 9 percent increase year-over-year due to improved light-duty automotive and diesel product sales, while core earnings were up 124 percent due to better manufacturing efficiency, the report says.
    • In Life Sciences, sales were $210 million, up 14 percent year-over-year, and core earnings were up 31 percent, driven by the recent acquisition of the Discovery Labware business.
    Page 2 of 2 - Although both are provided in quarterly reports, the company focuses on core performance measures rather than Generally Accepted Accounting Principles (GAAP), saying they provide a clearer view of results to investors.
    Core measures "exclude the impact of changes in Japanese yen to U.S. dollar exchange rate and other yen transactions, equity earnings from the polysilicon business of Dow Corning Corp., as well as other special items," according to the report.
    Corning Inc. will host its investors meeting Feb. 7 in New York City.
    There will be product and technologies demos before the meeting, and remarks by Chairman and CEO Wendell Weeks, Chief Financial Officer Jim Flaws, and Chief Technology Officer Dr. David Morse.
    One of the company's major annual events, it will focus on the outlook for 2014.
    In a preview released Tuesday, the company says it is expecting more severe price drops for LCD glass in Q1 due to seasonal factors, but overall sales growth for 2014 due to increased consumer demand for larger-size televisions and tablet computers.
    Corning Inc.'s stock closed at $17.10 on Tuesday, down $1.12.

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