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Corning misses by $0.01, misses on revs; Announces Strategic and Capital Allocation Framework
- Reports Q3 (Sep) earnings of $0.34 per share, $0.01 worse than the Capital IQ Consensus of $0.35; revenues fell 5.1% year/year to $2.45 bln vs the $2.5 bln Capital IQ Consensus.
- "The weakening global economy, particularly in China, and the stronger U.S. dollar impacted all of our businesses," R. Tony Tripeny, senior vice president and chief financial officer, said. "We are pleased with the improving pricing environment for LCD glass, and the strong industry acceptance of Corning Gorilla Glass 4, which is growing faster than we anticipated."
Strategic and Capital Allocation Framework
- Corning plans to deploy over $20 billion of capital through 2019 with the majority expected to come from operating cash flow.
- Today, the Board of Directors increased the company's share repurchase authorization by $4 billion. The company also announced plans to commence a $1.25 billion accelerated share repurchase program during the fourth quarter. Additionally, the company anticipates increasing its dividend per common share by at least 10% annually through 2019.
- By 2019 GLW will return more than $10 billion to shareholders through share repurchases and increased dividends. As part of this plan, Corning intends to target an adjusted debt-to-EBITDA ratio of 2, and to reduce its global cash to approximately $2 billion.
- Invest approximately $10 billion in Corning's focused portfolio.
Outlook
- Display Technologies: Corning expects its fourth-quarter LCD glass volume to be down slightly sequentially. Corning's LCD glass price declines are expected to decline less in the fourth quarter than in the third quarter.
- Optical Communications: Corning expects fourth-quarter sales to increase by a low-to-mid-single-digit percentage rate over its sales in the comparable period a year ago.
- Specialty Materials: Fourth-quarter sales are expected to decline at a low- teens percentage rate on a year-over-year basis.
- Environmental Technologies and Life Sciences: Sales of both business segments are expected to decline at a mid-single-digit percentage rate in the fourth quarter versus a year ago.
- Core equity earnings from Dow Corning Corporation are expected to be approximately $80 million.