Corning Foresees Profitability Return by Third Quarter of 2003.Business Editors CORNING, N.Y.--(BUSINESS WIRE)--Feb. 7, 2003 Weeks details four-step strategy LCD growth expected to continue at strong levels "Our plan to restore profitability is set and we expect to be profitable in the third quarter of this year," Corning Incorporated's (NYSE NYSE See: New York Stock Exchange :GLW GLW Glasgow Airport (UK) GLW Gross Laden Weight GLW Good Lady Wife (Australia) ) Vice Chairman and Chief Financial Officer James B. Flaws will tell investors today during Corning's annual investor conference in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Flaws will also say that the company expects to reach profitability despite anticipated weak performance in its Telecommunications segment this year. Corning will provide financial guidance for the first quarter of 2003, anticipating revenues in the range of $700 to $730 million, and a net loss in the range of $0.01 to $0.04 per share, excluding gains on debt repurchases and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. discussed below. Flaws will also tell investors that Corning plans to recognize equity earnings from Dow Corning Dow Corning is a multinational corporation headquartered in Midland, Michigan, USA. Dow Corning specializes in silicon and silicone-based technology, offering more than 7,000 products and services. Dow Corning is equally owned by The Dow Chemical Company and Corning, Inc. , beginning in the first quarter. "However, our plan to return to profitability by the third quarter of this year is not dependent on Dow Corning earnings," Flaws will say. In opening the conference, James R. Houghton James R. Houghton is the Retired Chairman of the Board of Corning Incorporated. Houghton has Bachelor of Arts and master of business administration degrees from Harvard University (A.B., 1958, MBA, 1962). , chairman and chief executive officer, will tell investors that Corning "is not merely a telecommunications company See telecom company. . Rather, we are a technology company with the materials and process expertise to create life-changing products." He will unveil a new quality initiative for the organization, central to each business' operating plan. "I believe passionately that the companies dedicated to quality, to performance, to integrity, to their people, and to their values are the only companies that will survive and thrive in this increasingly complex business world. Corning is one of these companies." Restoring Profitability Wendell P. Weeks, Corning's president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , will cite four key elements of the company's 2003 plan to restore profitability, including stable sales volume in optical fiber and cable, significant cost reduction benefit from its 2002 restructuring actions primarily in its Telecommunications segment, continued growth in the Corning Technologies segment, and reduced corporate operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . "Our restructuring actions from last year will be substantially complete in the first quarter and we expect to see a year-to-year bottom-line benefit in the range of $300 to $330 million in our telecommunications segment. Improvements to the bottom-line in the range of $100 to $120 million in the technologies segment will be driven by revenue growth in several key businesses and productivity improvements," Weeks will tell investors. "We have not built our plan on a market recovery in optical fiber and cable. While there is some evidence that these markets are stabilizing, we are anticipating flat year-to-year volume and positive cash flow, before restructuring costs, from these businesses." Additionally, he will tell investors that the company continues to narrow its photonics product line while it explores alternatives for the business. Weeks will announce that further exits of product lines could result in a pre-tax charge of $20 to $30 million in the company's first quarter results. Corning will maintain a leadership position in optical amplification and dispersion compensation products. Weeks will reiterate that the company is actively considering all options for this business, including partnerships, further product reductions or exiting the photonics market entirely. He plans to tell investors that the company will reach a decision on the future of its photonics business by mid-year. Weeks will review plans to continue reducing costs in 2003 by centralizing cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. and standardizing a number of administrative processes, and by reducing its research, development and engineering spending to 10% of sales. He will also say that the company's research and development focus will align with its current growth opportunities while maintaining its superior research capability. Technologies Weeks will also tell investors that the company's Technologies segment presents significant opportunity for growth, to be led by expected strong sales of flat-panel glass for liquid crystal displays liquid crystal display (LCD) Optoelectronic device used in displays for watches, calculators, notebook computers, and other electronic devices. Current passed through specific portions of the liquid crystal solution causes the crystals to align, blocking the passage of light. (LCD), a potential recovery in the semiconductor materials Semiconductor materials are insulators at absolute zero temperature that conduct electricity in a limited way at room temperature (see also Semiconductor). The defining property of a semiconductor material is that it can be doped with impurities that alter its electronic properties segment and continued increases in sales of catalytic substrates for gasoline and diesel engines. "We believe we are entering the golden age of growth for our LCD business," Weeks will say, "we expect to see annual revenue growth of at least 20% to 40% over the next several years." (See Corning's related news release on Corning Technologies.) Telecommunications Corning ultimately expects renewed growth in the telecommunications segment, but Weeks will tell investors that the industry must address three major structural issues before it occurs. These are changes in public policy, the improvement of telecommunications carriers' balance sheets to spur capital investment and the emergence of profitable broadband business models. "We believe the potential for the telecommunications market remains significant. Bandwidth demand is growing and will continue to grow. Telecommunications networks A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. are still in the early stages of a long technology substitution cycle. Optical remains a transcendent technology and will continue to penetrate networks around the world," he will tell analysts. Corning believes that worldwide demand for internet bandwidth traffic will grow at 60% to 80% annually, and that increases in broadband subscribers and the potential multi-billion dollar market in optical fiber replacement for copper cable installations will eventually drive a market recovery. However, Weeks will point out that the current U.S. regulatory environment provides little incentive for telecommunications investments and serves as a significant economic barrier to Fiber-to-the-Home investment. Financial Outlook Flaws will address the company's renewed governance standards, cash flow, the impact of Dow Corning equity earnings and Corning's debt ratings. He will tell investors that Corning meets all the new requirements from the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , Securities and Exchange Commission and Sarbanes-Oxley legislation, and that Corning had $2.1 billion in cash and short-term investments and access to a $2 billion line of credit at the end of 2002. Flaws will remind investors that Corning has already used approximately $160 million in cash to repurchase debt in the first quarter. This will result in pre-tax gains in the range of $25 to $30 million. Flaws also will point out that the company anticipates making a $60 million voluntary contribution to its pension plan this year, and expects to continue annual contributions at this level, unless market conditions improve. In an unrelated action today, Corning will announce that Catherine A. Rein, president and chief executive officer of Metropolitan Property and Casualty Insurance Company, is resigning from Corning's Board of Directors on Feb. 5, 2003 after 12 years of service. Corning's board will appoint Ms. Rein as a director emerita e·mer·i·ta adj. Retired but retaining an honorary title corresponding to that held immediately before retirement. Used of a woman: a professor emerita. n. pl. in honor of her distinguished service. The board will be reduced from 14 to 13 members. Conference Broadcast Information Corning will make the presentations at its annual investor conference available to the public by webcast and telephone access. The broadcast will be held today at 10 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The dial in number is (630) 395-0047. The password is Investor. The leader is Sofio. A replay of the call will begin at approximately 2 p.m. and will run through 5 p.m. EST on Friday, Feb. 21, 2003. To access the replay, dial (402) 280-9952; a password is not required. A live audio webcast will be available at www.corning.com/investor_relations/ and will remain there for 14 days following the call. About Corning Incorporated Corning Incorporated NYSE: GLW is an American manufacturer of glass, ceramics and related materials, primarily for industrial and scientific applications. The company was known until 1989 as Corning Glass Works. Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies that offer growth opportunities in markets that fuel the world's economy. Corning manufactures optical fiber, cable and photonic Dealing with light (photons). See photon and photonics. products in its Telecommunications segment. Corning's Technologies segment manufactures high-performance display glass, and products for the environmental, life sciences and semiconductor markets. Forward-Looking and Cautionary Statements This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes or fluctuations in global economic conditions; currency exchange rates; product demand and industry capacity; competitive products and pricing; availability and costs of critical components and materials; new product development and commercialization; order activity and demand from major customers; capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by larger customers in the telecommunications industry and other business segments; the mix of sales between premium and non-premium products; possible disruption in commercial activities due to terrorist activity and armed conflict; ability to obtain financing and capital on commercially reasonable terms; acquisition and divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). activities; the level of excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. ; the ability to enforce patents; product and components performance issues; and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . These and other risk factors are identified in Corning's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events. |
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