Corning Discusses Key Growth Opportunities: Expects New Glass Innovation for Consumer Markets

Extending Corning Incorporated's GLW current and emerging innovations into new markets is key to capturing significant new growth opportunities, Wendell P. Weeks, chairman, chief executive officer and president, will tell attendees at Corning's annual investor meeting today in New York. In opening the meeting, Weeks will remind investors that Corning's strategy calls for growth primarily through global innovation across a balanced product portfolio. He will point out that the company offers both strength and stability to investors. "We're financially sound. We are the market and technology leader in the industries we serve, as well as the lowest-cost producer for most of our products. Our businesses are all tied to significant trends, and our business diversity helps reduce our volatility during market and economic upsets. "We offer strong cash flow, a reliable dividend, and the earnings power to invest in growth. And, we have the opportunity for exceptional growth outside of our existing businesses," Weeks will say. Innovations with Breakout Potential Corning continues to focus on breakthrough innovations while also leveraging existing capabilities and assets to enter new markets and generate quick returns. "Let me illustrate," Weeks will offer. "When we launched Gorilla Glass in 2007, we basically created the market for tough, durable cover glass. Today, Gorilla Glass is featured on 1 billion devices worldwide. It is Corning's second-most-profitable business and the fastest-growing product in Corning's history." He will point out that "Our Gorilla Glass business has the potential to more than double in sales over the next several years," with three major trends driving this opportunity: smartphone volume growth expected to double and tablet computers to triple by 2016; large screen sizes for electronic devices using more cover glass; and touch technology moving to notebook computers, creating an entirely new opportunity. Additionally, he will explain to investors that Corning plans to bring forward new glass innovations for the consumer electronics market, including optimized touch and Radio Frequency (RF) capabilities; aesthetically pleasing shaped devices; and anti-reflectivity and antimicrobial properties. "We plan to have commercial launches for our shaped, anti-reflective, and antimicrobial Gorilla Glass solutions this year," he will reveal.   Future of Display Technologies "We are rapidly trending toward an 'always on' world, a world in which we can access information and communicate whether we're in our homes, in transit, or at our desks," James P. Clappin, president of Corning Glass Technologies, will tell meeting attendees. Clappin will explain that television trends, including larger screen sizes and faster replacement cycles, coupled with dynamic growth in high-performance tablets and smartphones "will continue to drive growth in the LCD glass market going forward." "Corning's advanced glass solutions support the intuitive, touch-enabled interfaces, as well as the high-resolution, and ultra-thin form factor requirements of this next wave of innovations in display," he will say. He also will note, "Many technological advancements first emerge in smaller applications like smartphones or tablets, and Corning's other advanced glasses are poised to address key display industry trends in these markets." Corning^® Lotus(TM) Glass is designed to offer superior performance for higher-resolution LCDs as well as OLEDs. Clappin will emphasize that the company remains optimistic about the OLED market, noting "all manufacturers making or developing OLED devices are relying on designs with two pieces of glass." In addition, Clappin will remind investors that Corning's newest advanced glass solution, the ultra-slim, flexible Corning^® Willow(TM) Glass, "could be the key that unlocks a host of next-generation displays." Corning^® Gorilla^® Glass Applications "Our outlook for Gorilla Glass is very positive," Clappin will say. "We have already surpassed $1 billion in annual sales last year, and now the new functionality of Gorilla Glass 3, in combination with significant consumer electronics growth trends, could enable the business to double in size over the next several years." The near future in consumer electronics, Clappin will explain, should bring increased penetration of the smartphone as the handheld device of choice; a 30% increase in screen size; a doubling of the popularity of tablet devices over the next four years; and touch applications emerging on notebook computers. Corning also sees growth possibilities for Gorilla Glass beyond the consumer electronic space. Clappin will tell investors, "The same qualities that make Corning Gorilla Glass so popular in the display category also afford us new opportunities in adjacent markets: transportation, interior architecture, appliances, and large-format displays."   Telecommunications Citing potential 2013 double-digit growth in Corning's Telecommunications Business Group, Clark S. Kinlin, executive vice president, will explain that the increasingly always-on world "is straining communication networks and providing tremendous opportunities for Corning." Rapidly expanding data storage requirements, ubiquitous access to that data, and quadrupling bandwidth demand all push the limits of existing networks, requiring major investments in optical infrastructure to meet consumer expectations. Kinlin will explain that Corning is able to bring together its market leadership in optical fiber, cable, connectors, hardware and actives to develop high-value optical solutions that expand bandwidth capacity and reduce costs for customers. Looking across his major business areas, Kinlin will explain that the global optical fiber market is expected to exceed 250 million fiber kilometers in 2013. The bulk of this growth is expected to come from developing markets. In positioning the company to address one of the key emerging markets, Corning opened a new fiber manufacturing facility in India last year. Providing a full suite of solutions across a wide range of application spaces, Corning continues to expand its Pretium EDGE(TM) solution for data centers; provides cost-effective pre-connected solutions for major fiber-to-the-home deployments around the globe; extends its distributed antenna systems for mobile access at large public-venue environments; and now offers Optical(TM) Cables by Corning, which enable consumers to have lightning-fast data transfer speeds over distances that greatly exceed the length limits of copper-based cables. Environmental Technologies The advancement of regulations aimed at improved air quality around the world can help grow Corning's Environmental Technologies profitability by more than 10% over the next several years, Mark A. Beck, executive vice president for Corning's Environmental Technologies and Life Sciences Business Group, will tell investors. He will explain that new "clean air" initiatives in China and India, along with tightening regulations in Europe and the U.S., should contribute to the anticipated growth in both light-duty substrates and heavy-duty products. Looking forward, Beck will point out that Corning is sampling new technologies to address: automotive emissions standards for improved fuel efficiency engines; expanded regulations impacting marine and locomotive regulations; and applications to help reduce greenhouse gas emissions. Life Sciences Corning's Life Sciences business is approaching $1 billion in annual sales, driven in large part by its recent acquisitions which have strengthened its global product and customer base. "We now have a broad portfolio of products that positions us well for the next wave in healthcare. Central to this is a trend toward biological therapies, which take a patient's unique environmental, behavioral, and medical needs into account. As a pioneer in cell culture research, we are well-positioned to address the emerging bioprocessing market," Beck will say. Path to a more Balanced Company James B. Flaws, vice chairman and chief financial officer, will reiterate the confidence Corning's management has in its expectations for continued sales and earnings growth for the company. The three trends of seamless, real-time information delivery, cleaner air, and advances in medical technology "are driving our growth now and will continue to do so over the next several years." He will point out that a large portion of this growth should come from emerging markets such as China, India, and Brazil. He will also note the important role that Dow Corning Corporation (an equity company) plays in Corning's future. "Dow Corning is an important contributor to our long-term growth, stability, and balance. Dow Corning remains the world leader in silicon and polysilicon production, as they focus on high-value, high-growth opportunities and make significant advances in expanding their geographic reach." He will also acknowledge that Dow Corning's Hemlock Semiconductor Group, will negatively impact Corning's equity earnings in the near future, as it addresses the tumultuous market conditions in the global solar industry. Flaws will review other important factors driving the company's financial performance: foreign exchange rates could continue to impact Corning's results; the company's solid plan to manage its positive cash flow through debt repayment and reinvestment in the company's future through capital spending of $1.3 billion in 2013; and the potential for additional returns to shareholders in the form of increased dividends or another share repurchase plan in the future.