Corning Reports 4th Quarter Display Revenue of $899m With a Net Margin of 26.7%
February 04, 2019
Corning reported 4Q and full year results but were discuss only the display glass and specialty materials. Competitors Asahi Glass, and NEG, have allowedglass-pricing declines to be maintained at historically low levels, despite the ups and downs relative to supply and demand. Coupled with high capital spending has kept competition to a minimum, even in China where capacity increases have occurred. China’s display glass industry, which is partially funded by state and local governments, and the impact of OLED technology on glass usage should only experiences a few minor bumps in the display glass road in 2019 and 2020.
Display Sales – Corning reported $899m in sales to the display segment, essentially in line with net margin of 26.7%, indicating that the co-located BOE Gen 10 display glass production lines are now contributing to margin improvement. Specialty Materials, which is primarily Gorilla Glass™, had sales for 4Q of $399m, and while margins were down slightly sequentially, the variability of that business, which depends on a supply chain not found in Corning’s regular display glass segment, likely accounted for the difference. Q119 guidance for the display segment was for glass volumes to be down ~5% Q/Q and moderate price declines, which are expected to be the most favorable 1Q declines in the last 10 years, with the full year 2019 declines in the mid-single digits, and better than 2018 declines. On a yearly basis guidance was for industry glass volumes to be up mid-single digits, with Corning’s display volumes up more than the industry. Q119 guidance for the specialty materials segment was for sales up mid-to-high single digits Y/Y, which reflect the pre-announcement build of smartphones to be announced at Mobile World Congress next month, although Corning gave no guidance for the segment for the full year.