Corning CFO Addresses Maxim Group Growth Conference

CORNING, N.Y., Oct. 9 /Xinhua-PRNewswire/ -- Corning Incorporated's (NYSE: GLW) Vice Chairman and Chief Financial Officer James B. Flaws provided an update on the company's Display Technologies segment and Corning's outlook for the 2009 display glass market during the Maxim Group Growth Conference on Oct 7, 2008 in New York City.

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Third-quarter glass volume shipments for the company's wholly owned business and Samsung Corning Precision Glass Co., Ltd. (SCP) grew 2% sequentially, which was lower than expected. Flaws explained that there was a more pronounced shift in glass demand to Corning's equity venture. "SCP's volume was up 12% in the third quarter, while volume at Corning's wholly owned business was down 10%, which was lower than expected," he noted. Despite the lower than expected volume at the company's wholly owned business, Corning still anticipates that its third-quarter earnings per share will be in line with the September revised guidance of $0.43 to $0.45, before special items.*

The company believes that inventory levels in the supply chain have declined, noting that Taiwanese panel makers reported improved panel shipments for August, while panel price declines have moderated. Flaws noted that Corning's glass pricing came in as expected in the third quarter and that the company currently intends to continue its pricing strategy in the fourth quarter.

"Retail sales data both in the U.S. and worldwide indicate that LCD television sales remained strong through August. In the U.S. alone, LCD TV unit sales were up 29% in August, slightly higher than we expected," Flaws reported. U.S. retail data is reported by the NPD Group's retail tracking service. The NPD Group is an independent consumer market research firm. Flaws reiterated the company's belief that the industry remains on track to ship 105 million LCD TVs into retail this year. "However, investors should note that 40% of these sales are expected to occur in the historically strong fourth quarter," he added.

Flaws also provided commentary on the fourth quarter, but did not note that the company did not provide specific guidance at the conference. "We believe that many Taiwanese panel makers may decide to continue to run at lower utilization rates for much of the fourth quarter. We actually think this may be more beneficial to the supply chain heading into the first quarter. If this happens, we would not be surprised if volumes at our wholly owned business decline sequentially in the fourth quarter. Regarding SCP, we believe their volumes could be higher if the Korean panel makers continue with their higher utilization rates," Flaws said.

* These are non-GAAP financial measures. The reconciliation between GAAP and non-GAAP measures is provided in the tables following this news release, as well as on the company's investor relations website.

He added, "Investors should note that our Telecommunications, Environmental Technologies and Life Sciences segments have traditionally had seasonally lower sales in the fourth quarter. We are already seeing an impact on our Environmental Technologies business segment from the slowdown in the auto industry."

"Looking ahead to 2009, the present economic turbulence creates significant uncertainty going forward. Consequently, we are widening estimates for 2009 worldwide LCD glass market growth to 15% to 25%," Flaws said. The company's previous growth estimate was 20% to 25%. "This would equate to the LCD glass market growing from about 2.25 billion square feet this year to 2.65 billion to 2.9 billion square feet next year, an increase of at least 400 million square feet."

"Given this economic uncertainty, we are prepared to adjust our production capacity to match end market demand," Flaws told attendees. He explained that Corning has decided to delay construction and startup of capacity associated with the fourth phase of its Taichung facility until later in 2010. The company may also decide to keep tanks planned for maintenance in the fourth quarter and early next year off line and could idle others as appropriate. "Our modular production structure allows us to quickly respond to changing market demand and effectively reduce certain costs," Flaws said.

As a result of the company's capacity decisions in the display glass business, Corning's total capital spending for 2008 and 2009 is expected to be approximately $400 million to $600 million lower. This year's capital spending will be between $1.8 billion and $1.9 billion, a reduction of $300 million to $400 million. 2009 capital spending is now expected between $1.6 billion and $1.7 billion, a $100 million to $200 million reduction from previous estimates.

"We are obviously in uncertain economic times. At Corning, we are making decisions now, to be ready for the potential of a worsening economy. In addition to the potential capacity levers in display, we have also stopped outside hiring and are preparing for capacity rationalization in other businesses if demand becomes weaker. Lastly, we will control the increase in our R&D spending to be much less than in recent years. This is not a reflection of a lack of confidence in our potential new businesses – if anything, our confidence is growing - but it reflects prudence about how much we spend during turbulent economic times," Flaws concluded.

Corning's presentation to investors at the Maxim Group Growth Conference was available beginning at 11:00 a.m. ET via webcast by accessing the investor events calendar on Corning's Web site at http://www.corning.com/investor_relations .

Presentation of Information in this News Release

Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning's non-GAAP net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company's non-GAAP measures exclude adjustments to asbestos settlement reserves required by movements in Corning's common stock price, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies, and gains from discontinued operations. The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company's underlying performance. These non-GAAP measures are reconciled on the company's Web site at http://www.corning.com/investor_relations and accompanies this news release.

About Corning Incorporated

Corning Incorporated ( http://www.corning.com ) is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements 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 in global economic and political conditions; currency fluctuations; product demand and industry capacity; competition; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; changes in the mix of sales between premium and non-premium products; new plant start-up costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political instability or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; stock price fluctuations; and adverse litigation or regulatory developments. Additional 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.