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

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

Key Investor Issues

- Sales were $1.42 billion, a 12.7% increase from $1.26 billion a year earlier.
- Net income.was $489 million compared to $514 million last year.
- Earnings per share were 30 cents a share, down from the year-ago 32 cents a share..
- Equity earnings were $220 million compared to $216 million in the first quarter.

Second Quarter Fiscal 2007 Highlights

Sales were $1.42 billion, a 12.7% increase from $1.26 billion a year earlier and 8.4% increase from $1.31 billion in the first quarter.

- The gross margin was 46.5%, a record margin in the company’s history.
- SG&A was $229 million, about 16% of sales while RD&E was $137 million, about 10% of sales.

Display Technologies Segment reported $ 610 million in sales, a 32% increase from the year ago quarter.

- The sales increased by 16% from the first quarter’s $524 million.
- Price declines were consistent with the first quarter and volumes increased by 20% from the first quarter and 58% from a year earlier which was partially offset by price declines and unfavorable Forex fluctuation.
- The volume increases were driven by continued demand for large-size glass substrates and popularity of LCD televisions.
- About 22 million notebooks were shipped, consistent with the first quarter performance, 39% of the computers sold.
- About 37 million LCD monitors were shipped with the market penetration level at 88%.
- About 15 million units of LCD television were shipped compared to 14 million in the first quarter with market penetration of 34% from 31% in the first quarter.

Telecommunications segment’s sales were $438 million, a 7% decline from $472 a year earlier and $439 million in the first quarter.

- Excluding sales from the company’s European submarine cabling business which was sold on April 27, 2007, net sales for the segment increased by 5% from the first quarter.
- Sales of hardware and equipment products were $219 million, a 4% decrease from $228 million in the first quarter. The sales were lower in the quarter due to a labor strike at a key European customer and more level purchasing patterns by a fiber-to-the-home customer.
- Sales of the company’s fiber cable products were $219 million, a 4% increase from $211 million in the first quarter primarily due to strong fiber demand especially projects for premium fiber.
- Net income for the segment was $40 million compared to $29 million in the first quarter.
- The quarter’s net income included a $19 million one time gain from sale of a non-strategic business.

The Environmental Technologies segment posted $191 million in sales, a 26% increase from $152 million same period a year earlier and 7% increase over the $179 million in the first quarter.

- The sequential sale increase was mainly due to the continued ramp of heavy duty diesel products and stronger automotive product sales in the European market.
- Auto product sales were about $128 million, up from $123 million in the first quarter.
- Diesel products sales were $63 million, a 12% increase from $56 million in the first quarter.

- The Life Sciences segment had $78 million in sales, a 4% increase from $75 million posted a year earlier.

- Sales from Other Segments were $101 million, up 13% compared to $89 million in the first quarter.

The company’s net income on non-GAAP terms, before special items, was $546 million, a 21% increase from the first quarter and 30% increase from same period a year earlier.

- The company recorded a pre- and after-tax charge of $76 million, reflecting an increase in market value of its stock, to be contributed to settle the asbestos litigation related to Pittsburgh Corning.
- The tax rate, excluding impact of special items, was 6%, which was lower than estimated.
- The lower tax rate was due to release of the reserves as a result of favorable tax ruling in Taiwan. This contributed $17 million or 1 cent per share to EPS.

Equity earnings were $220 million, compared to $216 million in the first quarter

- The equity earnings included $132 million from Samsung Corning Precision Glass Co. Ltd (SCP), a 17% increase from $113 million in the first quarter.
- SCP is a 50% owned venture in Korea, which manufactures glass panels and funnels for cathode ray tubes.
- Dow Corning Corporation generated $88 million in Equity earnings, a decline from $92 million in the first quarter.

Cash and short-term investments were $3.2 billion, up from 2.9 billion in the first quarter.

- The company’s debt level remained at $1.5 billion.
- The company will pay a 5 cents cash dividend per share in the third quarter, the first since April 2001.
- The management has approved a stock repurchase of $500 million by end of 2008.