Corning has reported its sales went down 4% in the third quarter of 2022, but believes that panel makers' utilization rates have declined to a "correction low point," with display glass prices remaining consistent.
Net sales for the third quarter reached US$3.5 billion, down 4% compared to both the previous quarter and the same period a year ago, Corning said. Net income for the third quarter came to US$438 million, down 10% both sequentially and annually.
"In the third quarter, our core sales were up slightly year over year, reaching US$3.7 billion, with core EPS of US$0.51 - all while display panel maker utilization reached its lowest level since 2008; smartphone, tablet, and notebook retail unit sales declined significantly; and automotive production remained constrained. We offset the effects of these factors by delivering 16% year-over-year growth in Optical Communications and by capturing ongoing demand in the solar market that contributed to 33% year-over-year growth in Hemlock and Emerging Growth Businesses," said Wendell P Weeks, chairman and CEO of Corning.
"While three of our key demand drivers are down, our cohesive and focused portfolio is providing strategic resilience in the current environment. We remain well positioned to deliver profitable multiyear growth. We'll continue to execute with discipline, invest where we see strength, and pace to demand," Weeks continued.
Display Technologies' sales declined 22% sequentially and 28% year over year in the third quarter, as volume declined in line with the market, Corning said, adding glass price was consistent sequentially.
"As we told investors in early September, panel makers reduced their production levels below our already low expectations. Our lower glass volume resulted in a 28% year-over-year decline in Display Technologies' sales and caused a drag on the company's overall profitability. Our participation in important secular trends and general outperformance across our markets helped offset this impact," said Ed Schlesinger, executive vice president and chief financial officer.
"Looking ahead to the fourth quarter, we expect US$3.45 billion to US$3.65 billion in core sales with core EPS of US$0.41 to US$0.47. Although we believe that panel maker utilization reached the bottom in September, we would like to see more evidence before we guide a significant recovery in glass demand. When glass demand does increase, we expect our volume to return and company profitability to improve. We also expect Optical Communications' sales to be down sequentially due to customer project timing. We expect to continue outperforming our markets and will maintain strong financial stewardship," Schlesinger continued.
Corning financial results, 3Q22 (US$m) | |||||
3Q22 | 2Q22 | Q/Q | 3Q21 | Y/Y | |
GAAP net sales | 3,488 | 3,615 | (4%) | 3,615 | (4%) |
GAAP net income | 208 | 563 | (63%) | 371 | (44%) |
GAAP EPS | 0.24 | 0.66 | (64%) | 0.43 | (44%) |
Core sales | 3,666 | 3,762 | (3%) | 3,639 | 1% |
Core net income | 438 | 489 | (10%) | 485 | (10%) |
Core EPS | 0.51 | 0.57 | (11%) | 0.56 | (9%) |
Source: Corning, compiled by DIGITIMES Asia, October 2022
Display Technologies results, 3Q22 (US$m) | |||||
3Q22 | 2Q22 | Q/Q | 3Q21 | Y/Y | |
Net Sales | 686 | 878 | (22%) | 956 | (28%) |
Net income before tax | 169 | 287 | (41%) | 311 | (46%) |
Net income | 134 | 228 | (41%) | 247 | (46%) |
Source: Corning, compiled by DIGITIMES Asia, October 2022
Specialty Materials results, 3Q22 (US$m) | |||||
3Q22 | 2Q22 | Q/Q | 3Q21 | Y/Y | |
Net sales | 519 | 485 | 7% | 556 | (7%) |
Net income before tax | 122 | 115 | 6% | 135 | (10%) |
Net income | 96 | 91 | 5% | 107 | (10%) |
Source: Corning, compiled by DIGITIMES Asia, October 2022
Optical Communications results, 3Q22 (US$m) | |||||
3Q22 | 2Q22 | Q/Q | 3Q22 | Y/Y | |
Net sales | 1,317 | 1,313 | — | 1,131 | 16% |
Net income before tax | 233 | 233 | — | 177 | 32% |
Net income | 183 | 182 | 1% | 139 | 32% |
Source: Corning, compiled by DIGITIMES Asia, October 2022
