Corning Sees Moderate Growth in 2010

Demand for LCD products remains strong

Innovation adjacencies key focus

CORNING, N.Y., Feb. 10 /PRNewswire-Asia/ -- Strong worldwide consumer demand for LCD televisions, notebook computers, and myriad handheld personal communication devices should drive increased sales and earnings for Corning Incorporated (NYSE: GLW) in 2010, company executives told investors on February 5, 2010. Corning is also increasing its focus on "adjacent innovation," which could create new annualized revenue opportunities worth as much as several billion dollars within the next few years. These remarks were made for Corning's annual investor meeting beginning at 9 a.m. at TheTimesCenter in New York.

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"We are broadening our innovation strategy to take advantage of adjacent opportunities to create more near-term revenue growth," Wendell P. Weeks, chairman and chief executive officer, explained. "While we remain committed to maintaining both our market and technology leadership positions in our existing businesses, we plan to leverage the attributes and capabilities in two of Corning's core technology platforms -- fusion-formed flat glass and bendable optical fiber -- to build opportunities in new markets. The rapid growth of intuitive touch-display for consumer electronic devices, advanced glass for thin-film photovoltaics, and optical fiber for consumer electronics and wireless networks are providing us with such opportunities," he explained.

Weeks pointed out that the company will continue investing approximately 10% of its revenue into its innovation portfolio "as we develop keystone components that enable high-technology systems for consumer electronics, emissions control, telecommunications, and life sciences."

Corning's Growth Opportunities

Innovation Adjacencies

"Extending our original technologies into new markets has been a Corning hallmark for more than 150 years," Peter F. Volanakis, president and chief operating officer, reminded investors. "For example, the fusion-forming process that we invented in 1964 was originally used to produce glass for sunglasses. Twenty years later we extended and modified these technologies and processes and established our LCD glass business. This adjacent innovation opportunity became a home run for Corning."

"Our highly scratch-resistant and damage-resistant Gorilla(R) glass is the latest example of extending technologies into new markets. We took our fusion process and chemical strengthening capabilities and established Gorilla glass for display devices," he said. Introduced only 18 months ago, Gorilla glass already accounts for $80 million in revenue and has the opportunity to be a $300 million business within the next few years. "Additionally, we plan to extend our fusion-formed flat glass into other markets that could create as much as $1 billion in future revenue opportunity," Volanakis remarked.

Volanakis explained that the company is also using its flat-glass capabilities to develop a thin-film photovoltaic glass for solar panels, which has already been successfully demonstrated in laboratory test conditions, and extending its expertise in optical fiber to develop fiber-based systems for indoor distributed antenna systems (IDAS) and very-short-distance networks (VSDN) such as in-home high-bandwidth personal networks.

Display Technologies

Global consumer demand for LCD televisions and personal computers will be the primary driver behind the company's anticipated 14% to 22% increase in total LCD glass demand in 2010. Total glass volume for the year could reach three billion square feet. In 2009, the worldwide glass market was 2.45 billion square feet. "The high end of our estimation represents one of the largest volume increases in the history of LCD glass manufacturing," John L. Geniviva, division vice president and director of strategy and marketing, Display Technologies, told participants.

In 2009, worldwide television sales increased by only 1%, while LCD TV sales increased by 35%. Corning expects that approximately 171 million LCD TVs will be sold this year, representing a 21% year-over-year growth rate. The absolute growth of LCD TVs in North America will slow as market penetration in the U.S. reaches 90% in 2010, and China will become the world leader in total television sales this year. "We expect the China market to absorb about 37 million LCD televisions this year, a 32% year-over-year increase," Geniviva noted. Corning also expects the personal computing market (notebooks, netbooks and monitors) to grow by about 13% this year.

"Long term, we believe that technology advancements for LCD televisions, shortened replacement cycles, and attractive growth opportunities in developing countries will keep the overall market growth rate above historical levels," Geniviva concluded.

Telecommunications

Martin J. Curran, senior vice president and general manager, Corning Optical Fiber, told investors that worldwide demand for optical fiber solutions grew significantly despite the recession. Fiber demand grew by more than 17% in 2009, driven by continued investment in the China broadband infrastructure, which itself improved by more than 70% year over year. As the China 3G network build slows this year, Corning expects that worldwide optical fiber demand will level off and be even with or down about 5% compared to last year's strong performance.

"However, looking forward, we believe that innovation will drive future growth opportunities," Curran said. While overall fiber-to-the-home installations have been slower than anticipated, Corning expects international government fiber network investments to create new market opportunities. "We also expect the data center market to grow significantly over time, driven by video-based content creation," he explained.

Environmental Technologies

Both Corning's automotive and diesel products businesses were severely impacted by the global economic recession last year, but "We are beginning to see signs of a significant auto industry recovery," Thomas R. Hinman, senior vice president, Corning Environmental Technologies, pointed out. "We expect the automotive vehicle market to grow by 10% this year and auto production could grow faster than historical rates over the next several years. As in a number of Corning businesses," Hinman noted, "China is a significant driver of this recovery. In 2009, China became not only the world's largest producer of cars but also the largest consumer of vehicles as well."

Hinman explained that, although the heavy-duty diesel market is unlikely to experience an upturn in production for at least another year or two, "we continue to believe in the potential of this market. We anticipate that diesel truck production will return to the normal 200,000 vehicles per year by 2012 or 2013. This will present Corning with an annual total diesel revenue opportunity near $500 million by 2012."

Emerging Technologies

Dr. Joseph A. Miller, executive vice president and chief technology officer, reviewed the company's emerging technology portfolio and point out the company's high rate of innovation delivery. Corning has been granted approximately 200 new patents each year, and more than 50% of the company's revenues over the past three years have come from new products. Miller shared examples of recent new product introductions, including the Corning(R) Epic(R) system, a high-throughput label-free screening process for drug discovery. There are currently more than 30 systems in use around the world, and Corning recently entered into a strategic collaboration with PerkinElmer to develop next-generation label-free detection technologies. Miller explained that the company has also extended its gas-permeable membrane technology into higher-volume markets and identified significant market opportunities for its Advanced-Flow (TM) glass reactors for chemical processing.

Financial Outlook

James B. Flaws, vice chairman and chief financial officer, told investors, "We believe all our business segments have the potential for growth. The 2010 glass market will be larger than last year, the auto industry will grow, and we have significant demand for our Gorilla glass product." He pointed out that equity earnings will be significant for Corning in 2010. "Dow Corning Corporation should see sales increase by more than 10% this year, with strong performance in both its silicone business and Hemlock Semiconductors."

Total capital spending for Corning is planned to be in the $600 million to $700 million range but could climb if adjacent opportunities are successful. Corning's tax rate is expected to be about 10%.

Conference Broadcast Information

Corning's annual investor meeting was held on Friday, Feb. 5 at TheTimesCenter, located at 242 W. 41st Street, New York. Corning's products and technologies was on display from 7:45 a.m. - 9:00 a.m. Corning will make the presentation at its annual investor conference available to the public through a video and audio webcast and telephone access. The broadcast will begin at 9 a.m. EST. The dial-in number is (800) 230-1766 (U.S.) or (612) 234-9960 (international). The password is 2010 Analyst Meeting. The leader is Sofio. A replay of the call will be available at 1 p.m. EST and will run through 5 p.m. EST on Friday, Feb. 26, 2010. To access the replay, dial (800) 475-6701 (U.S.) or (320) 365-3844 (international). The passcode is 143292. The audio webcast will be archived for one year following the call.

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning's financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring 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. These and other risk factors are detailed 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.

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.