Corning (GLW) Q4 2023 earnings summary

Executive summary

• FY 2023 core sales fell 8% to $13.580B; core gross margin rose 30 bps to 36.3%, and adjusted free cash flow was $880M.

• Q1 2024 is expected to be the low quarter, with recovery as markets normalize and a medium-term opportunity for more than $3B in annualized sales.

Financial highlights

• Q4 GAAP sales were $2.994B, down 6% QoQ and 12% YoY; core sales were $3.272B, down 5% QoQ and 10% YoY.

• Q4 GAAP net loss was $40M with diluted EPS of -$0.05; core net income was $339M and core diluted EPS was $0.39.

• FY GAAP sales were $12.588B versus $14.189B; core sales were $13.580B, down 8%. GAAP net income was $581M and core net income was $1.463B.

• FY diluted GAAP EPS was $0.68 versus $1.54 in 2022; core diluted EPS was $1.70 versus $2.09.

• Q4 operating cash flow was $713M and adjusted free cash flow was $487M versus $377M; FY figures were $2.005B and $880M, respectively, versus $1.243B in FY 2022.

Outlook and guidance

• Q1 2024 core sales are forecast at ~$3.1B, core EPS at $0.32–$0.38, and gross margin similar to Q4; Q1 is expected to be the year's low quarter.

• Q1 adjusted free cash flow is forecast at $(100M)–$(200M), an improvement of $200M–$300M from Q1 2023's $(383M).

• FY 2024 Hemlock and Emerging Growth Businesses sales are projected at $1.35B–$1.45B; capital expenditures at ~$1.2B, tax rate at 20%–21%, SG&A at 12.5% and RD&E at 7.5% of sales.

• Management expects sales to rise from Q1 levels, supported by carrier deployments, panel-maker utilization and continued market normalization.

• Market normalization could support more than $3B in medium-term annualized sales, with strong incremental profit and cash flow.