Corning Outlines Growth Businesses

Date: 13 February 2007
Source: Corning
Growing demand for liquid crystal display (LCD) television, increased regulatory requirements for reduced diesel engine emissions and expanding broadband capabilities are critical drivers of Corning Incorporated’s (NYSE: GLW) long-term growth strategy, Wendell P.

Weeks, president and chief executive officer, will tell investors today.

Weeks and other senior executives will present Corning’s view on the markets it serves at the company’s annual investor relations meeting to be held at the Mandarin Oriental Hotel in New York City beginning at 9 a.m. today. The presentations will also be broadcast live via the company’s Web site.

In his opening remarks Weeks will say, “Last year at this meeting I said that 2006 would be a year of execution and a year that would tell us a lot about our business strategy. I think that our record performance for net income and earnings per share last year and progress in our key growth businesses demonstrates that we succeeded.”

“As we look forward to 2007 and beyond,” Weeks will say, “The future of Corning appears bright. We are committed to maintaining our global leadership in LCD glass, gaining the majority share of the emerging heavy-duty diesel emissions control market opportunity, and capturing the growth which is returning to the telecommunications industry. Our goal is to deliver another year of growth to our shareholders.”

“Corning also has some very exciting growth opportunities well beyond those of 2007,” Weeks will add. “We are pleased to be able to share with you today just a few of the many new technologies in development in our very robust innovation pipeline.”

Growth Opportunities

Display Technologies

Peter F. Volanakis, chief operating officer, will explain to investors that the rapid decline in retail pricing and subsequent increase in consumer demand for LCD televisions will drive annual LCD glass market demand to nearly two billion square feet by 2008. “This represents a compound annual growth rate of about 30 percent,” he will say. “It is our belief that LCD TV penetration should reach 33 percent of the global color television market this year, and 45 percent by 2008.” Volanakis will point out that the majority of glass volume growth will be fueled by both the popularity of LCD televisions and the movement to larger screen sizes. The average LCD screen size will grow to nearly 32 inches in 2008 from the average 28 inches today.

“We believe that by 2008, LCD glass demand for televisions alone will be nearly equal to the size of the entire glass market in 2006,” Volanakis will say. Worldwide LCD glass demand reached 1.2 billion square feet last year. He will also tell investors that by 2010, LCD will be the leading television technology, surpassing the cathode ray tube in worldwide unit sales. “The penetration rate of LCD television in North America should reach 61 percent and in Japan, nearly 90 percent by 2008. We also expect to see significant penetration of LCD TVs in the developing Chinese market. In fact, we believe that by 2010, the Chinese LCD TV market will be about the size of the North American market,” he will say.

Volanakis will also point out that LCD is rapidly gaining share in the 40-inch and larger TV segment as leading TV brands shift to LCD technology and as consumers recognize LCD’s performance benefits in 1080p high-definition (full HD) format. And, Volanakis will outline Corning’s abilities to address the seasonality inherent in the LCD TV market, encouraging investors to watch long-term end market trends rather than reacting to short-term supply chain news.

Corning expects notebook penetration to reach as much as 40 percent of total personal computers sold, and LCD monitors to exceed 90 percent of the desktop market by 2008, Volanakis will also note. Adding to this LCD glass demand will be an anticipated growth rate in excess of 20 percent from 2006 to 2008 for small handheld devices.

Diesel Products

“We are expecting significant growth in our diesel products business in 2007, driven by our leadership position in the U.S. heavy-duty vehicle market and continued expansion into the light-duty business,” Thomas R. Hinman, senior vice president and general manager, Corning Diesel Technologies, will tell investors. “We believe we can grow our diesel products revenue by more than 60 percent this year and have the potential to realize $500 million to $600 million in revenue by 2010.”

Hinman will remind investors that new U.S. diesel engine standards that went into effect on January 1, 2007 require all heavy-duty engines to utilize a filter system solution that will greatly reduce particulate matter (PM) and nitrogen oxides (NOx) emissions. “Global emissions regulations will continue to tighten and drive demand for our advanced diesel products solutions,” he will say.

“This is a milestone year as heavy duty represents the first significant growth opportunity for our diesel business," Hinman will point out. “We expect another wave of growth as the U.S., Europe and Japan implement more stringent emissions standards for light-duty and heavy-duty applications. Non-road vehicles represent a third revenue opportunity at the end of this decade. We believe Corning is well positioned to lead in all three areas,” he will tell investors.

“We expect the market opportunity could reach $900 million for each of the heavy-duty and light-duty diesel application segments by 2012. In looking at this on a projected product value basis, the global opportunity for heavy duty is expected to be approximately $340 per vehicle this year, and may reach as much as $475 per vehicle by 2012,” Hinman will add.


Larry Aiello, president and chief executive officer, Corning Cable Systems, will tell investors that Corning has seen a steady improvement in its Telecommunications segment results over the past several years. “We expect this trend to continue in 2007,” he will state. Aiello will say that the nearly universal goal of providing triple-play (voice, video and data) bundled services, along with the emergence of high-definition television and improved telephony offerings will drive network expansions and improvements through the remainder of the decade.

“Corning’s core competencies and innovation track record position us well to solve key challenges in the access networks,” Aiello will say. “We expect to introduce a suite of new optical fiber and cable, as well as hardware and equipment products this year that can dramatically reduce the labor costs for network installations in multi-dwelling units. This has the potential of creating a significant new revenue stream for our Telecommunications segment in the future,” Aiello will tell investors. From 2003 to 2006, the introduction of numerous product innovations enabled the company to gain a strong position in the access market while providing more than $500 million of savings to Corning’s telecommunications customers.

Emerging Technologies

Joseph A. Miller, chief technology officer, will review Corning’s sustained investment in innovation to provide longer term growth for the company. “We believe that we are heading into one of the most promising periods of Corning innovation,” Miller will say.

“The rich portfolio of research and development projects tied to the company’s current growth platforms in display, diesel, telecommunications and life sciences are expected to provide significant growth over the next several years,” Miller will say. “Reaching beyond these near-term growth areas, we have multiple emerging technologies that have the potential to provide Corning with its next wave of growth.”

A few of these promising new technologies to be highlighted by Miller include microreactors, silicon on glass and synthetic green lasers. These technologies are still in the early stage of development and it is difficult to predict when or if the company will see commercial success, Miller will explain.

600450 Corning Outlines Growth Businesses
Date: 13 February 2007
Source: Corning

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