Corning Incorporated has announced its second quarter 2023 financial results and provided its outlook for third quarter 2023.
Wendell P. Weeks, chairman and chief executive officer, said, “Corning’s second-quarter results reflect progress on our comprehensive plan to improve profitability and cash flow – even in the current weak end-market environment. As expected, core gross margin expanded 1 percentage point sequentially, and has grown more than 2 percentage points since the beginning of the year. We also improved free cash flow to USD 310 million.
“We expect to continue improving profitability and cash flow despite our relatively muted sales environment. Furthermore, our ‘More Corning’ approach is opening additional revenue streams. Taken together, we anticipate strong operating leverage when our markets recover and our volume returns.”
Second-Quarter 2023 Highlights
- Second-quarter GAAP sales were USD 3.2 billion, up 2 percent sequentially. Core sales were USD 3.5 billion, up 3 percent sequentially, driven by Display Technologies. GAAP and core sales were down year over year, reflecting continued lower demand in several markets.
- Second-quarter GAAP EPS was USD 0.33, up 65 percent sequentially. Core EPS of USD 0.45 increased USD 0.04, or 10 percent, from the prior quarter. The difference between GAAP and core EPS stemmed primarily from restructuring charges and also from non-cash, mark-to-market adjustments associated with the company’s currency-hedging contracts and Japanese-yen-denominated debt.
- Core gross margin of 36.2 percent and core operating margin of 17.5 percent increased sequentially by 100 basis points and 200 basis points, respectively, reflecting pricing and productivity improvement actions.
- Second-quarter free cash flow improved from the first quarter to USD 310 million.
Third-Quarter 2023 Outlook
In the third quarter, management expects core sales of approximately USD 3.5 billion and core EPS to be about the same or slightly better than in the second quarter.
Ed Schlesinger, executive vice president and chief financial officer, said, “In the second quarter, sales grew 3 percent sequentially as higher sales in Display Technologies more than offset a decline in Optical Communications. We executed well on our comprehensive plan to improve profitability and cash flow. Core operating income increased 16 percent sequentially, and free cash flow grew to USD 310 million.
“Looking ahead, we will continue improving profitability and cash generation in the second half despite our current sales outlook. Overall, we remain well positioned to capture upside, and as sales grow, we’ll drive strong operating leverage.”
The full report is available here.