This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Corning Inc. (GLW: chart) on January 28, 2008.

Chairman, Chief Executive Officer: Wendell Weeks
Vice Chairman, Chief Financial Officer: Jim Flaws
Division Vice President, Investor Relations: Ken Sofio

Key Investors Issues

- Earnings per share increased to 45 cents from 41 cents in prior year.
- Quarterly revenue grew 16% over last year to $1.58 billion.
- For fiscal 2007, net profit was $2.26 billion, on revenue of $5.86 billion.
- The firm expects first quarter sales to be between $1.59 and $1.62 billion.

Fourth Quarter Fiscal 2007 Financial Highlights

The fourth quarter sales were $1.58 billion and exceeded the top end of the firm’s guidance range.

The fourth quarter sales were 16% higher than a year ago. The fourth quarter sales benefited from the strengthening of the Yen and the US Dollar exchange rate by $31 million and another $11 million due to the strengthening of the Euro in comparison in quarter three. The Yen to US Dollar averaged $1.18 in quarter three and $1.13 in quarter four.

EPS, excluding special items, was 40 cents and was at the top end of the revised guidance range.

This represents a 29% increase over fourth quarter EPS excluding specials of 31 cents a year ago. Net income excluding special items was $643 million, an increase of 32% over last years’ net income excluding special items. Due to foreign exchange, EPS benefited by about 2 cents per share. Versus last year, the fourth quarter sales benefited by $51 million from movement in Yen and Euro and EPS benefited by about a penny and a half.

The firm had three special items in the fourth quarter.

- An after tax gain of $103 million to reflect the release of valuation of certain deferred assets in Germany.
- A pre-tax and after-tax net charge of $15 million related to the Pittsburg Klein Litigation. The charge included a gain of $17 million reflecting a decrease in the market value of Corning common stock to be contributed. Corning share price decreased during the quarter from $24.65 to $23.99. This gain was more than offset by $32 million charge related to the increase in the fair value Pittsburg Corning Europe, which is an asset expected to be contributed to the settlement. The value of Pittsburg Corning Europe increased during the quarter due in part to the strengthening of the Euro.
- The charges towards Samsung Corning CRT.

Including these special items, the fourth quarter EPS was 45 cents per share.

- The gross margin in the fourth quarter was 47.8% and was consistent with the third quarter.
- SG&A was $257 million and 16% of sales as expected.
- RD&E in the fourth quarter was $153 million and was 10% of sales.

- Equity earnings were $267 million in the fourth quarter compared to $239 million in the third quarter. The increase is primarily due to volume growth in a positive foreign exchange impact at Samsung Corning Precision. Fourth quarter equity earnings included net special charges at Samsung Corning CRT of $14 million. There are also similar special charges totaling $18 million in the third quarter.

- The tax rate in the fourth quarter was 10% and slightly lower than our guidance of 12%.
- The share count for the fourth quarter was 1.6 billion shares.

- The firm ended the fourth quarter with about $3.5 billion in cash and short term investments, up from $3.3 billion at the end of the third quarter.
- Free cash flow was $346 million in the fourth quarter and for the year free cash flow was $806 million, much higher than original estimates and another all time record for Corning.
- Operating cash flow was over $2 billion for the year another record.
- The company repurchased approximately five million shares of stock for $125 million.

Fiscal 2007 Financial Highlights

The full year 2007 represented the fifth consecutive year of significant growth especially on the bottom line.

- In 2007, the sales reached $5.86 billion, an increase of $686 million or 13% over 2006. This represented the third highest annual sales year in the company’s history.
- Gross margin for the year was 46.9%, a significant increase over last years’ 44.1% and the highest percentage in the firm’s history.
- SG&A was 15.6% of sales and lower percentage of sales than 2006 when it was 16.6%. The firm is delivering on its commitment to gain operating leverage and keep its SG&A spending growth at less than half the rate of sales growth.
- Net profit after tax excluding special items was $2.26 billion, an increase of 27% over last year and again an all time record.
- Earnings per share excluding special items were $1.41 in 2007, an increase of 29 cents over last year or 26% up.

Performance Analysis of Segments