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Corning Inc.$33.83($.96)(2.76%)

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 Corning Reports Fourth-Quarter and Full-Year 2016 Financial Results and Significant Progress on Strategy and Capital Allocation Framework
   Tuesday, January 24, 2017 7:10:53 AM ET

Record Corning(R) Gorilla(R) Glass volume and accelerating Optical Communications growth provide momentum for 2017

CORNING, N.Y.; JANUARY 24, 2017 - Corning Incorporated (GLW ) today announced results for fourth-quarter and full-year 2016.

News Summary:

- Fourth-quarter results provided a strong finish to 2016: Q4 GAAP EPS of $1.47, up 765%, and core EPS of $.50, up 47%, year over year; Q4 GAAP and core sales up 11% and 6% respectively, year over year

- Business segment performance highlights included record Corning(R) Gorilla(R) Glass volume, driven by rapid adoption of Gorilla(R) Glass 5; acceleration of Optical Communications growth; and continued moderation in price declines in Display Technologies

- Significant progress since introducing the Strategy and Capital Allocation Framework, returning $6 billion to shareholders and advancing focused portfolio initiatives

- Year-over-year sales, net income, and EPS growth expected in the first quarter of 2017

"Corning delivered outstanding fourth-quarter results, continuing the momentum that began earlier in the year," said Wendell P. Weeks, chairman, chief executive officer and president. "Our very strong finish to the year was highlighted by year-over-year core sales growth of 6%, core earnings growth of 24% and core EPS growth of 47%. We are encouraged by this strength, and expect growth in these year-over-year measures in the first quarter of 2017."

Strategy and Capital Allocation Framework Progress

Corning’s Strategy and Capital Allocation Framework outlines the company’s 2016-2019 leadership priorities. Under the Framework, Corning plans to deliver more than $12.5 billion to shareholders while investing $10 billion in growth opportunities.

Since the Framework was announced, the company has achieved key milestones including the return of $6 billion to shareholders by increasing the dividend 12.5% and repurchasing 22% of its outstanding shares; and completing the realignment of Dow Corning Corporation, which unlocked tremendous value for shareholders.

"As we enter the second year under our Framework, the strategic and financial benefits of Corning’s focused portfolio are even more apparent," said Weeks. "We’re particularly pleased to see our market-access platforms continue to evolve as we anticipated. Progress on our initiatives include the rapid adoption rate of Gorilla(R) Glass 5; new platform wins from major OEMs for gas particulate filters; and customer commitments that support long-term growth opportunities in Optical Communications. The strong response to our cutting-edge glass innovations at the recent Consumer Electronics Show is yet another illustration."

"In 2017, we will continue to advance the objectives of our Strategy and Capital Allocation Framework," Weeks added. "We expect to increase the value of Corning products used on mobile devices, accelerate growth in Optical Communications, commercialize gas particulate filters, and make advancements in pharmaceutical glass and Gorilla Glass for Automotive. Corning’s focused portfolio positions the company well for the long-term."

Fourth-Quarter and Full-Year 2016 Results and Comparisons

(In millions, except per-share amounts)

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $2,476  $2,507  (1%)     $2,231  11%      $9,390         $9,111         3%
GAAP Net Income      $1,572  $284    454%     $224    602%     $3,695         $1,339         176%
GAAP EPS             $1.47   $0.26   465%     $0.17   765%     $3.23          $1.00          223%
Core Sales*          $2,551  $2,548  -        $2,402  6%       $9,710         $9,800         (1%)
Core Earnings*       $534    $466    15%      $429    24%      $1,774         $1,882         (6%)
Core EPS*            $0.50   $0.42   19%      $0.34   47%      $1.55          $1.40          11%

*Core performance measures are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release, as well as on the company’s website. Core performance metrics (non-GAAP) are adjusted to exclude the impact of changes in Japanese yen and Korean won foreign exchange rates, as well as other items that do not reflect ongoing operations of the company. Corning does not forecast the movement of the Japanese yen against the U.S. dollar or other items that do not reflect ongoing operations. As a result, the company is unable to provide guidance on a GAAP basis. See "Use of Non-GAAP Financial Measures" for details on core performance measures.

Segment Results and Outlook

Display Technologies:

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $830    $902    (8%)     $732    13%      $3,238         $3,086         5%
GAAP Net Income      $243    $279    (13%)    $243    -        $935           $1,095         (15%)
Core Sales*          $904    $943    (4%)     $903    -        $3,556         $3,774         (6%)
Core Earnings*       $276    $270    2%       $234    18%      $1,006         $1,075         (6%)

NOTE: In all segments except the Display Technologies segment, core net sales are consistent with GAAP net sales. Because a significant portion of revenues and costs in the Display Technologies segment are denominated in Japanese yen and Korean won respectively, this segment’s net sales and costs are adjusted to remove the impact of translating yen and won into U.S. dollars.

In the fourth quarter, Display Technologies reported strong results, with core sales of $904 million, consistent with a year ago, and core earnings of $276 million, up 18%. Full-year core sales were $3.6 billion, and core earnings were $1 billion.

For full-year 2016, the percentage rate of growth in the LCD glass market and demand for Corning’s glass was in the mid-single digits. Corning’s sequential glass price declines remained moderate throughout 2016.

For full-year 2017, Corning expects the rate of growth in both retail market and glass demand to be in the mid-single digit percentages. In the first quarter of 2017, the company expects Corning’s volume to increase by mid-teen percentage year over year, and decline by mid-single digit percentage sequentially. The company expects an overall favorable LCD glass price environment for the full year, with price declines more moderate than in 2016.

Optical Communications:

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $819    $795    3%       $736    11%      $3,005         $2,980         1%
GAAP Net Income      $67     $84     (20%)    $33     103%     $245           $237           3%
Core Earnings*       $87     $98     (11%)    $47     85%      $297           $281           6%

Fourth-quarter 2016 sales in Optical Communications rose 11% and core earnings rose 85% over 2015. Sales growth of fiber-to-the-home solutions in North America, along with improved manufacturing performance, contributed to the higher year-over-year profitability. Full-year 2016 sales were $3 billion and core earnings were $297 million.

In the first quarter of 2017, year-over-year Optical Communications sales growth is expected to be at least 25%. Full-year 2017 sales are expected to increase by a low-teens percentage over 2016.

Environmental Technologies:

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $245    $264    (7%)     $254    (4%)     $1,032         $1,053         (2%)
GAAP Net Income      $27     $35     (23%)    $29     (7%)     $133           $161           (17%)
Core Earnings*       $27     $35     (23%)    $29     (7%)     $136           $161           (16%)

In Environmental Technologies, fourth-quarter and full-year sales were down slightly year-over-year. Sales of light-duty substrates in both periods were strong, driven by global automotive demand, but demand for heavy-duty diesel products remained weak. Full-year 2016 sales were $1 billion and core earnings were $136 million.

For the first quarter of 2017, year-over-year segment sales are expected to be consistent to down slightly. Full-year 2017 sales are expected to be consistent to up slightly from last year with continued strength in the automotive market and lower demand for heavy-duty diesel products. Sales of the company’s new gas particulate filters are expected to begin during the second half of 2017.

Specialty Materials:

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $336    $295    14%      $275    22%      $1,124         $1,107         2%
GAAP Net Income      $68     $42     62%      $39     74%      $174           $167           4%
Core Earnings*       $65     $44     48%      $44     48%      $189           $178           6%

Specialty Materials fourth-quarter 2016 sales rose 22% over last year, led by record Gorilla Glass volume, while core earnings were up 48%. Full-year 2016 sales were $1.1 billion and core earnings were $189 million.

In the first quarter of 2017, year-over-year segment sales growth is expected to be in the high-teen percentages. The company expects full-year 2017 segment sales to increase, with the rate of growth dependent on the timing and extent of customers deploying Gorilla Glass 5 and other Corning innovations.

Life Sciences:

  Q4 2016 Q3 2016 % change Q4 2015 % change Full-year 2016 Full-year 2015 % change
GAAP Net Sales       $206    $214    (4%)     $202    2%       $839           $821           2%
GAAP Net Income      $13     $16     (19%)    $9      44%      $58            $61            (5%)
Core Earnings*       $17     $21     (19%)    $12     42%      $77            $73            5%

In Life Sciences, sales were up year over year for both fourth-quarter and full-year 2016, and core earnings growth outpaced that of sales. The Life Sciences segment is expected to have low-single-digit percentage sales growth for first-quarter and full-year 2017, ahead of forecasted market growth rates.

Upcoming Investor Events

On Feb. 14, Corning will attend the Goldman Sachs Technology and Internet Conference to be held in San Francisco at the Palace Hotel. Corning also will attend the Morgan Stanley Technology, Media & Telecom Conference on Feb. 28 in San Francisco at the Palace Hotel.

Corning will host its annual investor meeting in New York on Friday, June 16 at CURRENT at Chelsea Piers.

Fourth-Quarter Conference Call Information

The company will host a fourth-quarter conference call on Tuesday, January 24, at 8:30 a.m. EDT. To participate, please call toll free (800) 230-1085 or for international access call (612) 288-0329 approximately 10-15 minutes prior to the start of the call. The host is "NICHOLSON". To listen to a live audio webcast of the call, go to Corning’s website at, click "Events" and follow the instructions. A replay will be available beginning at 11 a.m. EDT and will run through 5 p.m. EDT, Tuesday, February 7. To listen, dial (800) 475-6701 or for international access dial (320) 365-3844. The access code is 413658. The webcast will be archived for one year following the call.

Presentation of Information in this News Release

Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning’s non-GAAP financial measures exclude the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in the company’s operations. The company believes presenting non-GAAP financial measures assists in analyzing financial performance without the impact of items that may obscure trends in the company’s underlying performance. Detailed reconciliations outlining the differences between these non-GAAP measures and the most directly comparable GAAP measure can be found on the company’s website by going to the Investor Relations page and clicking "Financial Highlights" under the "Performance" tab. These reconciliations also accompany this news release.

Caution Concerning Forward-Looking Statements

This press release contains "forward-looking statements" - that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. These forward-looking statements relate to, among other things, the company’s future operating performance, the company’s share of new and existing markets, the company’s revenue and earnings growth rates, the company’s ability to innovate and commercialize new products, and the company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the company’s manufacturing capacity.

In this context, forward-looking statements often contain words such as "will," "believe," "anticipate," "expect," "intend," "plan," "seek," "see," "would," and "target". Although the company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business, and key performance indicators that impact the company, actual results could differ materially. The company does not undertake to update forward-looking statements. Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to: competitive products and pricing; availability and costs of critical components and materials; new product development and commercialization; order activity and demand from major customers; unanticipated disruption to equipment, facilities, or operations; facility expansions and new plant start-up costs; our ability to pace capital spending to anticipated levels of customer demand; the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; and the effectiveness of our risk management framework.

For a complete listing of risks and other factors, please reference the risk factors and forward-looking statements described in the annual reports on Form 10-K and quarterly reports on Form 10-Q.

Digital Media Disclosure

In accordance with guidance provided by the SEC regarding the use of company websites and social media channels to disclose material information, Corning Incorporated ("Corning") wishes to notify investors, media, and other interested parties that it intends to use its website ( to publish important information about the company, including information that may be deemed material to investors. The list of websites and social media channels that the company uses may be updated on Corning’s media and website from time to time. Corning encourages investors, media, and other interested parties to review the information Corning may publish through its website and social media channels as described above, in addition to the company’s SEC filings, press releases, conference calls, and webcasts.

About Corning Incorporated

Corning ( is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics, and optical physics to develop products that have created new industries and transformed people’s lives. Corning succeeds through sustained investment in R&D, a unique combination of material and process innovation, and close collaboration with customers to solve tough technology challenges. Corning’s businesses and markets are constantly evolving. Today, Corning’s products enable diverse industries such as consumer electronics, telecommunications, transportation, and life sciences. They include damage-resistant cover glass for smartphones and tablets; precision glass for advanced displays; optical fiber, wireless technologies, and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery and manufacturing; and emissions-control products for cars, trucks, and off-road vehicles.

Media Relations Contact:

M. Elizabeth Dann

(607) 974-4989

Investor Relations Contact:

Ann H.S. Nicholson

(607) 974-6716

Corning Incorporated Q4 2016 Financials

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Corning Incorporated via Globenewswire

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