This summary is based on the first quarter fiscal 2007 earnings call conducted by Corning Inc. (GLW: chart) on April 25, 2007.

President and CEO: Wendell Weeks
Vice Chairman and CFO: Jim Flaws
Division VP, Investor Relations: Ken Sofio

Key Investors Issues

- Including special items, the earnings per share was 20 cents in the quarter.
- Quarterly revenue dropped 5% over the sequential fourth quarter to $1.31 billion.
- The firm ended the quarter with about $2.9 billion in cash and short-term investments.

First Quarter Fiscal 2007 Financial Highlights

The first quarter sales of $1.31 billion were at the top-end of the firm’s guidance range.

Compared to the fourth quarter, sales declined 5% and compared to the first quarter of the year ago, sales were up 4%.

The EPS before special items was 28 cents

This exceeded the top-end of firm’s guidance range by 1 cent and exceeded expectations by 2 cents. Net profit after-tax, excluding special items, in the first quarter was $452 million, a decrease of 7% versus the fourth quarter. In comparison to the first quarter of 2006, net profit after-tax excluding special items was up $27 million or 6%.

Corning recorded two special items in the first quarter.

- The firm recorded a pre-tax and after-tax charge of $110 million, primarily reflecting the increase in market value of Corning common stock to be contributed to the asbestos litigation related to Pittsburgh Corning. Corning’s share price increased during the quarter from $18.71 to $22.74.
- The firm also incurred a pre-tax and after-tax charge of $15 million related to retirement of debt.

Including these two items, the first quarter EPS was 20 cents per share.

Gross margin in the first quarter was 45%, slightly higher than the fourth quarter and in line with the firm’s expectations.

It was also consistent with the first quarter of last year.

- SG&A was $214 million, about 16% of sales.
- R&D was $130 million, about 10% of sales.

Equity earnings were $216 million in the first quarter compared to $272 million in the fourth quarter.

The equity earnings in the fourth quarter had included a $28 million net nonrecurring gain. Sequential decline in equity earnings was less than anticipated due to better than expected results at the both Dow Corning and Samsung Corning Precision.

The tax rate in the first quarter excluding the impact of special items was 19%.

This is slightly higher than the firm’s guidance range of 15% to 18%. The share count for the first quarter was 1.6 billion shares.

The firm ended the quarter with about $2.9 billion in cash and short-term investments, down from $3.2 billion at the end of the fourth quarter.