Corning Incorporated Q2 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Corning Incorporated (GLW) Q2 2021 Earnings Summary

Overview: Corning reported strong Q2 2021 results driven by double-digit growth across all five segments, favorable pricing in Display, and momentum in Optical Communications. Results reflect recovery from pandemic lows and continued execution of the "More Corning" content strategy. Core metrics exclude special items related to the Samsung Display share repurchase transaction.

Key Financial Highlights (Comparisons to Prior Periods)

  • Sales: $3.5 billion, +35% YoY vs. Q2 2020; +17% vs. Q2 2019 (added >$500M quarterly sales since Q2 2019, ~$300M organic).
  • Core EPS: $0.53, +112% YoY vs. Q2 2020; +18% vs. Q2 2019.
  • Core Net Income: $459 million, +111% YoY vs. Q2 2020.
  • Free Cash Flow: $471 million (+65% YoY vs. Q2 2020); H1 2021 total $843 million.
  • Gross Margin: 37.8% (+450 bps YoY vs. Q2 2020; +200 bps sequentially).
  • Operating Margin: 18.3% (+710 bps YoY vs. Q2 2020; +120 bps sequentially).
  • GAAP Note: GAAP net income $449 million; GAAP EPS loss of $0.42 due to preferred stock extinguishment accounting for Samsung transaction (core EPS would have been $0.52 excluding this).

Segment Performance

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Operator: Welcome to the Corning Incorporated Quarter 2, 2021 Earnings Call. [Operator Instructions] It is my pleasure to introduce you to Ann Nicholson, Vice President of Investor Relations. Ann Nicholson: Thank you, Katherine and good morning. Welcome to Corning’s Quarter 2, 2021 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; Tony Tripeny, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer. I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the company's financial reports. You should also note that we will be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business. In the second quarter, GAAP net income was $449 million. However, GAAP EPS was a loss of $0.42 due to the GAAP accounting treatment required for the transaction entered into with Samsung Display. Let me take you through why this was the case. As a reminder on April 5, 2021, Corning entered into a share repurchase agreement with Samsung Display. As part of the agreement, Samsu

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