Corning, Inc. (GLW) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 25, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to the Corning Incorporated Quarter 2 2023 Earnings Call. [Operator Instructions]

It is my pleasure to introduce to you, Ann Nicholson, Vice President of Investor Relations.

Ann Nicholson

Thank you, and good morning, everybody. Welcome to Corning's second quarter 2023 earnings call.

With me today are Wendell Weeks, Chairman and Chief Executive Officer; Ed Schlesinger, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer.

I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the company's financial reports.

You should also note that we'll be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business.

For the second quarter, the difference between GAAP and core EPS stemmed primarily from restructuring charges and from non-cash mark-to-market adjustments associated with the company's currency hedging contracts and Japanese-yen-denominated debt. In total, these increased core earnings in the second quarter by $19 million. As a reminder, the mark-to-market accounting has no impact on our cash flow. A reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at corning.com.

You may also access core results on our website with downloadable financials in the Interactive Analyst Center. Supporting slides are being shown live on our webcast. We encourage you to follow along. They're also available on our website for downloading.

And now I'll turn the call over to Wendell.

Wendell Weeks

Thank you, Ann. Good morning, everyone. Today, we reported second quarter results to demonstrate strong progress on the priorities we've outlined to improve profitability and cash flow in the current weak end market environment.

Sales were $3.5 billion. EPS was $0.45. Gross margin and operating margin increased sequentially to 36.2% and 17.5%, respectively; and free cash flow improved to $310 million. Ed will give you the details on each of these in just a few minutes.

Our results reflect solid execution on our plan to deliver financial and operational improvements in response to the significant after effects of the pandemic still rippling across the global economy. Now we've been discussing this plan with you for several quarters. So, let me just briefly recap the primary factors we've been addressing.