Corning (GLW) 31 Jan 232022 Q4 Earnings call transcript

Welcome to the Corning Incorporated Fourth Quarter 2022 Earnings Call. [Operator Instructions].

It is my pleasure to introduce to you, Ann Nicholson, Vice President of Investor Relations.

Thank you, Crystal, and good morning, everybody. Welcome to Corning's fourth quarter 2022 earnings call. and Wendell Vice and Officer; President Evenson, Vice are Ed Executive and today Executive Executive Officer. Schlesinger, and President me Weeks, Chief Chairman Officer; Jeff With Strategy Chief Chief Financial

detailed actual like These uncertainties fall the the Reform and that that in Act other remind forward-looking Securities These factors XXXX. cause the within that remarks factors meaning today's I'd reports. contain results to financial statements materially. statements of Private are of to differ Litigation you company's involve could risks,

You should consolidated comments measures, specifically also note be data. discussing our that unless results our we'll are indicate GAAP performance using to related core we

measures business. to are performance used measures analyze core by the management Our non-GAAP

primarily associated fourth charges mark-to-market $XXX total, from as noncash For debt. the and earnings with well in restructuring the quarter GAAP fourth the the stemmed difference as adjustments quarter, currency increased core In between foreign by hedging company's these contracts EPS and million. core

mark-to-market impact As accounting a has cash reminder, on flow. no the our

A at be website found reconciliation Investor GAAP value our the of to can results Relations section of in comparable corning.com. the core

You to the Analyst and available Supporting may website are on results for our slides on shown on follow you downloading. Interactive along. being website live They're we Center. our financials downloadable encourage also webcast, core with access in our also

And now I'll turn the Wendell. call over to

poses while of and implications year, global well series advanced reported the and the initiatives, cash addressing full quarter we a executed Today, effects year ripple fourth margins environment Thank results. that sales Ann, to we morning, generation. financial Throughout good the and Nevertheless, current you, the everyone. and continued strategic for economy. XXXX grow across pandemic-driven to

full was of $X.XX level both EPS the billion. to deliver, our was sales sales sales building Gross well as billion tablets flow end we margin range. billion year, to by grew recession we constitute by and the cash $X.XX continue with the X% confronting on normal smartphones, XX%. range. guided the fourth Cars, in high of sales. And the and strong our X% about we of $X.X for $X.XX. For XXXX, were demand laptops quarter, of our growth that I'm $XX.X at EPS estimate what Free essentially below pleased are all despite markets is televisions, to what and half

cash of where Now this in said, the strength our we've That solar we demand optical not by as versus free markets. businesses the growing them outperformance communications our are offset with to need as well end consumer flow weak markets ongoing be. and our and profitability positions

like I'd Today, usual market format the So dynamics to you on some our want progress our to platforms. doing deviate I'll results, our financial what discuss in driving from perspective and for focus address I we're I external give across our insight to and calls, dynamics. these on which access those

delivering Since pandemic, our large has environment hit, external were of and the When for our protecting the in chain characterized been swings by impact consumer and our XXXX, pandemic priorities depressed productivity, including inflation. customers. core the spending supply people disruptions, sweeping the

XXXX, with higher-than-normal staffing throughout So levels. and we elevated inventory operated

persistent maintained. and and inventory produce addition, ship to our of and In the purchased, to the cost inflation the raw materials unpredictable, we cost we sometimes products quite added

As a result, and growth. our our growth have sales in cash flow profitability lagged

half and improve action year, took made needed. the progress to the more was While it became cash XXXX profitability of and clear first we during generation that good throughout

communications again, So with in quarter, including and we optical our raising significant share prices, to the customers. additional in more appropriately sciences cost life actions the and fourth took inflationary

maintain near reliable and our productivity capture Because to and and chains the improved, to supply for levels metrics closer impacting customers we ability historical Adjusting have our supply supply below. expect normalizing our in our productivity ratios at growth current to or to inventory future get without inventory. term,

of will flow our XXXX. throughout actions Now and these cash margins improve all

have already press margins to anomalous benefits than Typically, to declined sequentially morning, X year, seasonality. margins and our perspective. first we you actions. our about our a we first declined of as X% historical about from contrast, Now In and X sales quarter inferred to release decline quarter to to by points. increase sales both from expect may profitability this be first our more we This recent due normal quarter expect sales the expect sequentially

significant shifted the already our China driving the sales below a quarter outlook situation In wave of impact approach sentiment which consumer COVID products seasonal is in Display, have, in the the demand low. shortages, Specialty particularly workforce well, and for our and to spending outbreaks pandemic What's consumer for and turn, lower first ensued. was unfolding This as resulted its Environmental Materials. December, in where China, in

consumer issues overcome improve, to demand of in we We too these and to as call sentiments you posted We'll expect demand. learn timing and China to keep improvements but the specific more. it's early

we interim, to be and continue sales from further. And to we and our drive expect capture to the In operating growth improve well grow, benefit to leverage as positioned innovation. our profitability

think too rebound to on early I call definitive it's be in our full results. the to year difficult -- China, Given it's

Here's can what I say.

run an sales XXXX X are of First, our not rate. indication quarter our

growth if second see year-over-year sales be in quarter, second disappointed sequentially didn't the half. grow and in we the didn't Second, I'd

fourth throughout quarter benefits significant the profit our XXXX. and of cash flow actions be Finally, will

revenues profitability we to we increase. see return increase, demand see and expect our our As consumer

to having feel want Now underscore perspective, prospects. portfolio we I our our how great about focused shared long-term and near-term

of relevance them, that set of trends. Across our to are capabilities secular As capturing are we compelling thing a opportunities leadership come. growth more of is each markets, evaluate we with our of our uncertainties, there the trajectory, given one certain long-term to is lot the and a

and If more. make record early we demand driven are Optical Cable we could multiyear the of computing. fiber could densification XXXX. billion especially in $X XG and sell In cloud we're robust. by a a we build And more, Communications, on still building phases remains believe cycle broadband, we

we we sustainable a upside significant the continue In and correction. to solar, U.S.-based we chain ongoing the Reduction growth renewable stable solar the we tied industry supply energy to from to and throughout in industry, position price very contribute a Inflation growth capture and potential display, strong Act. benefit see excellent market In maintained as

We emerge from customer correction expect manufacturing and refreshed fleet the to with sales strengthened increasing and relationships of profit.

product strong the approach In consumer industry ongoing more outperforming we with mobile and our through anticipate to Corning our leadership, electronics, continue ongoing and we we innovations, of expect adoption our markets serve collaboration leaders. our

content to pleased as by $XXX return. of throughout Automotive we'll Moving Solutions Glass our evidenced growth to strong outperforming our our and period a industry growth more on continues sales in per remain We adoption opportunity, by even automotive. we're progress be car We've technology and capture market focused as the constraint. And of building ready been car in XXXX. our

differentiated Sciences, the and support Life in medicines delivering discovery focused delivery cell-based tools we're and to Finally, modern drugs. on of

Our improving are operations unprecedented correction as the shifts the by its completes COVID. from demand caused industry

testament through our the the opportunities we gone uncertainty can what long what we're and macro near term. I forward. the outlined I've believe those progress of that we're deal I set term, the characterizes doing also a capturing growth to I've uncertainties. achieve with rich over now far So is to And going so told you

strategy growth the before Let's in introduced and framework XXXX, onset that take shortly the we a look to XXXX pandemic. back of XXXX at the

compound growth included ongoing we at experienced annual X% X%. challenges. goals grew in universally external even sales of rate XXXX at the the From than Our growth face through and to a X% greater XXXX, CAGR, of

surging we've significant years, Apple, delivered opportunity on X automotive, to period and depressed meet delivered introduced advanced past shield data of the end of Over and initiatives. a filter in strategic we key our particulate ceramic in strong communications. and growth demand versus outperformance facilitate fiber-to-the-home driven center which strong gasoline optical have with both solutions We content We markets.

for fight extend to we global plants a televisions, business, past pharmaceutical Glass to our innovations. leadership and XX.X on our the in progress years. central packaging large forward traction glass role portfolio health Gen Solutions significant our and Automotive play ran We the over emerging in in major our gained X leaped made our the We

vials doses XX billion Our tubing supported X have than COVID-XX than more countries. delivery and now more of the in

in growth. our position the have our multiyear challenging leadership for across markets, we delivered we've growth paved extended a future sum, In environment. way We've and sales

I achievements. are outstanding these think

as of The productivity improve in But term. short this, our the our actions generation. quarter. China today. we Since to actions Now with see protected the pricing sales hold our up in in profitability these I start impacts first expect certainly our the and recent unfolding for you wrap my significant what I'd the additional remarks, leave to like sales delivered of now our we as completed and, pandemic, situation cash evidenced to the customers. We've growth, despite and here's people take benefits in

of of to advancing focus Overall, business success moment, and to our as the capabilities economy each will well we needs and stabilizes. global while adjusting as growth the drive initiatives that will continue the simultaneously operating on meet

in Our multiyear in And focused we cash with deliver that current to provides growth even ability cohesive and the our resilience and results confident portfolio improved is our environment. strategic remain evident generation. in margins durable,

details so of Ed into with get the priorities, outlook. our Now the results and over I'll call our can he financial turn to along

of consumer-facing sales had in X% on face Wendell. outperformed Building X% record you, reflect $X resilience to end delivered we sales strong we total, the solid in and year EPS to last ongoing performance, $XX.X and solar everyone. we optical full our We Thank continue billion grew and a markets, in growth In year, external Good our year's our to challenges. results we capture communications. of morning, billion $X.XX.

share Sciences Communications customers, and heard we supply appropriately in inventory our growth lagged by to future adjusting growth. fourth productivity actions, without closer the from strong ratios metrics address you Wendell, flow our Life our and in Optical the and cash our inflationary with raising this, ability further $XXX more again impacting including historical and reducing quarter. prices million sales To As capture our costs to profitability took to have

the in sales despite from of and will these start see suppressed China Wendell sentiment that the low We the disruption to described. first quarter actions in benefits consumer

inventory. to I Sales quarter that, XX%, due billion operating guidance. was fourth EPS impact coming of fourth by our points favorably reducing the sequentially, our both was sequentially. the quarter estimated a high end was quarter, impacted $X.X XX%, margin the our XX.X%. Through $X.XX margin down was the basis third $X.XX, Fourth including turn down points tax EPS gross tax to in in of performance. XXX quarter And adjustment. were and basis will XXX both rate With was at

required Our rate resulted actual an rate was low XX% XX.X%. in quarter. core the in XXXX tax adjustment fourth The tax unusually

$XXX slower the our Fourth beginning projects with billion, last look were million, X the was sequentially, on reflecting year, full quarter to at inventory. pacing call. $XXX sales down on of let's we while to results and of grew customer a million XXXX drove $X $XX strength Communications. a volume Now million. quarters of $X.X take income discussed $XXX of Net year-over-year Optical our impact first the lower annual sales million billion, and reflecting segment net fourth increase, all-time sequentially of closer an for quarter XX% high The XX% the reducing down income that

believed to timing We we recovery maker October shape but maker the climbed to November, to Display. utilization levels encouraged said Moving very begun. were the panel early in then a see or On and call again indicating September, bottom had was recovery. had in we utilization it in reached our then call, too last the of panel

a and reopened China believe since panel leveled of December utilization We outbreaks resume maker and its December, has that recovery. in in in wave maker will January. utilization decreased ensued, significant off COVID However, panel

sequentially execution the cover sequentially outlook consistent the are Display our glass Net million. makers $XXX more $XXX volume. Display and additional with in operating the below Fourth panel fourth third moment. on January, sales in strong income up I'll grew million, XX% current XX% as of the was reduced demand. quarter In quarter was a quarter to rate price on expected.

Glass down and price full for in XXXX. the net the year both the was the correction impact year, full second billion income consistent with year-over-year, $XXX half. the was of million, $X.X reflecting industry sales For were

other over first in 'XX few consistent experienced price driven favorable and of the last fourth the continue, glass the the quarter Corning by offline glass be glass have glass we maintenance to with for pricing to factors: align glass to extended supply continue makers after demand. an period additional repairs taking and and first, X tanks of tightness. quarter, we years anticipate expect We to environment been makers

align we you demand. latest are As our we've of to we told taking actively to supply upgrade with restarts managing this to our technology, opportunity before, tank the the and timing are fleet

is It volume maintain of to low high high this and profitability. for factor during makers costs Another glassmakers challenging is inflation. fixed glass who period have profitability

demonstrated this recovers, correction stable maintained volume meaningful. fourth increased will and market in have price from We be position market as the industry our quarter and incrementals the when through

of for optics premium In by products. Gorilla Specialty Glass Optics market, IT which were XX% next-generation our which the but customer smartphone Materials, were $X fourth materials. down sales grew XX%. launches X%, was and semiconductor $XXX year-over-year. we down product strong and quarter outperforming Advanced demand sales driven sales outperformed equipment markets X%, glasses year million Full flat market, continued of XX% by and were strength the advanced our sales driven billion, down down was

reality. markets, new next-generation augmented as million, for down income as consumer net $XXX materials devices year-over-year year Full investment bendable was and continued semiconductor and equipment as X% in well electronics such to due

year-over-year. sales a XX% in fourth China by million, levels I driven down X%, net Sequentially, quarter in Display. were In Environmental quarter sales fourth up $XXX was income by in impacted million, year-over-year. similar OEM mentioned $XX Technologies, December, XX% And dynamics were COVID up production decline

Full in growth China and income auto restricted. weak increased markets sales for productivity remain light full global of $XXX was to flat and as year prices. billion versus the Net million $X.X were improved X% XXXX heavy-duty raised year we our as market and

sales Fourth demand sales down, $XXX for by impact by inventory. sequentially net was to quarter and quarter income the products. lower of Fourth Life year-over-year, driven Sciences. million, COVID-related reducing Turning down were impacted and lower

with consistent COVID-related led year operations. XX% sales a million, were income the significantly products productivity demand down billion in in XXXX, shift strong net while unexpected $X.X $XXX a was of away Full our lower as manufacturing from to

for $X.X sales XX% emerging quarter both year-over-year reflecting million, we fourth Hemlock were And in year-over-year, XX% finally, see strong and billion, continue grade year solar in sales semiconductor full sequentially. up as and businesses, and robust polysilicon And demand up $XXX growth the for polysilicon. to were demand XX%

saw strong Pharmaceutical Solutions also Glass growth and in Automotive We Technologies.

and To that approach close recap, optical grow segment we're secular pleased sales out us our outperform trends Corning and enabled markets. solar in my more to our and

growth. outlook. capture long-term our well positioned We and to maintain to are trajectory Turning attractive an

quarter, Looking X our the about X at term, typically, near about sequentially first declined in to sales declined margins points. the and X%

X- the margin first expect we X% recent and to quarter, XX%. decline quarter. contrast, This we've to sales we productivity X-point expect improvement the In a actions sequential of price taken, with in about a

to total, for and quarter, sales core we range $X.X In the the anticipate in of in EPS the of billion $X.XX billion to range $X.XX. $X.X

playing Our first outlook has the December. across in the situation which The dynamics current and is we consumer COVID labor reflects in industries sentiment of China since serve. lifted quarter impacted out some availability, were sales restrictions

expect has in And lower levels saw we first the Display, in For we panel in the industry example, saw we back January by in I now we October remain to maker production environmental, decline recovery the a to display utilization as With levels. quarter. that, quarter. least December in been mentioned, at believe delayed OEM

a China we have better through we'll situation after feel Lunar will New you and share the more Year, quarter. in the We the as go with for

As a first quarter our usually the reminder, is lowest year. of quarter the volume

capital So sales I'll XXXX we XXXX. note second quarter. year grow expect in consistent to sequentially expect be also to with that the we expenditures full And

other X cover I to close, topics. I Before want

First, currency to I want address to take exchange a rates. minute

ability actively effective enhance hedged and protect foreign serves to to our decade. shareholder flow, volatility, earnings the returns. a This our reminder, cash As reduce have we protect invest over as exposure tool currency past an our

the is yen. Our exposure largest Japanese

most investors, have most hedged. As of of now we hedged. XXXX We previously with XXXX also we've have shared

in rate of We've the at our core hedge certainty the end more our inception. keep XXXX. hedging program through with very to at provides. We're least X-X-X, their billion pleased expect since under than and received our We economic it cash contracts $X

balance strong sheet debt as include to cash Second, growth, the and creating tenors Examples organic excess addition CFO, shareholders. one efficient of in maintaining top a include priorities S&P the for XXX. in investing and to longest returning my

billion coming average given maturity instruments rate our And rate. X in in is are with debt years, years interest significant all due is the current debt year. due any $X exposure debt no and only very because debt low coming in XX Our essentially next fixed our

cash the X even we consistently over excess shareholders the is one Additionally, have last returned and pandemic, ways dividends. the to years, we throughout do that of through

have our consecutive XX have years. increased We dividend grown we and since for XX% XXXX, our dividend

top quartile the S&P XXX at is X%. dividend Our yield in

As we rate raising approve $X.XX dividend, share. to $X.XX in quarterly will increase annual enter XXXX, our recommend per Board the the we from an that

long-term our back, growth drivers intact. Stepping remain all

recover, sales continue we CAGR as than key to in positioned As grew markets to growth macroeconomic resume sales challenges, XXXX our ongoing tied we're optical X% secular and well capturing and In solar. of and the will greater a XXXX. growth since X% such face trends, delivered of

near-term taking to impacted, period. cash benefits we We have our actions results adapted the have this in in and the to actions flow throughout And QX QX, expect while and see profitability meet we year. been our took of additional throughout needs,

that, over With turn Q&A. I'll Ann it back to for

Thank our we're for question. ready first Ed. you, Crystal,

first America. [Operator Wamsi our Instructions] will Bank of from And from come Mohan question

the increasingly rate? the core about I should we Wendell. core XXXX significantly said happening think the imagine from one rate if from as through for is you core be but yen XXXX away will Ed, and XXX the of hedge XXXX, have this your rate think Ed, I rate. your impact for would transactions one about are How we away

curious availability flagship bringing. for on any about b, Corning's I'm bendable on these Ed Wendell, the particularly products, for the both by customers? commercial in and technology talk thoughts since of augmented it mentioned And reality you're you that can role kind And script? in

question this your take Wamsi, yen is I'll Ed. first. Yes.

are our clarity, close to core at our rate our actually and of rate in XXX. why hedged, expect hedges keep we to for core have and XXXX. 'XX exposure our And we just So most that's

With the recent we and XXXX. were able hedges place strengthening January, in the put to yen in in for more December

cost Is just sorry, if I could -- that. different 'XX is the to Ed, in up It 'XX? on significantly follow and hedge

No, not different. significantly

question and for on augmented reality. Thanks your bendable

For displays is mother which one manufactured opportunities, make able to of which matured is than do upon display. of LCD sort glass displays are the make we're one X be to bendable relatively of to bendable, typical which glass a does. those the we have we Actually significant a consumes more in,

the our new material for see in investment we of believe is of to true bulk This has that where devices -- Second, has not investment the needs a product that innovation customer. meeting is It of today. the cover the led is innovation effort been many bendables. still bendable you the

novelty. So we that of mainstream to take than products just that series have This and a a to new space. able doing innovations be next of can number we're to effort that to the try in expect introduce new us is make see be and to technology years, whole it continue for going rather you

major light talk I to of the and In that has, eyes. and digital that about don't wave then be we make And field two, material in want the X that front again, much augmented COVID-related, your is One sometimes create reality, efforts. once guys in detail. too

significant both the these have efforts long quite we term. in for reality, areas, augmented embryonic industry, so but exciting And

from come next our Oppenheimer. Yang Martin from will question And

the adjusting should -- revenue. guidance Can to the think about OpEx improve we there the you else EPS? talk comparing in the growth knowing likely for, for more is guidance. gross for the benefit, sequentially sequential is EPS looking margin core anything tax decline to that implied sequentially? margin be from question Is about first My I

X% if incrementals and sales. given earnings adjust lower are a per think tax XX% actually improve actually, Martin, sequentially for one. should margins, the our we've it's sales rate, for given that share. you going And we've the I'll reasonable to both you're sequentially. level Remember, both of the down margin, gross you. right, range take guidance sales and Obviously, a I on operating in No,

I correctly. you're doing your So Martin, yes, think math

margin in our the lines significant rate You're for delta gross and from muted both quarter to pretty quarter X. in profitability seeing the increase somewhat us at and a by X operating tax

you've think I got it.

it. one automotive glass, question Got or infotainment Or side? glasses? growth highlighted as more you is the external Can windshield the seeing And the of then areas. are it you maybe and adoptions about, you in talk on for a

on are happens, more bulk set in is the is interior rate us curved revenues in these with when The by and introduced of large displays being more ColdForm – that large our all products. And of current seen the exterior. and technology. with highest you’ve trends patented What’s products. growth our in The very our that interior the

they especially is well, are noisy, noisy. as them experience you as vehicles, least with world the because But so electric quiet, at outside more

is and is result amount of the new of that beyond And we’re of of technologies one windshield as to cost And the electric and which that And create takes adoption vehicle, structure that HVAC so that energy in we’re to backlights. well. take-up laminate a the technologies, within maintain unique of as to a the nice seeing often, an seeing weight advantage. [rooms], system of it very quite with laminated we performance, our adoption both leading Gorilla pair sidelights,

JP next Samik question our Morgan. come Chatterjee from And will from

XQ. you question color display. panel maker XQ? just of on a on seasonality changes more your a X-part the What into terms of utilization a How in bit you're range you give around question display had of of thoughts outlined a I sort normal you're the sort you or volume in expecting sort to the seasonality are of in variance in display expecting much are XQ? us sequentially know seeing actually volume? there difference or of lower I and Could what typical

China second unit sales point any here, outlined of even to year, thoughts the TV at And outside spending or sir, it's sort a this I China watch for know you as if TV on consumer but of that, sales part markets point? the a

first second one. question. make me sure your I let understand I your Samik, understand

panel to the see in expect utilization within beyond quarter we how quarter? asking X maker you're So

panel quarter, in utilization related seasonality Within and volumes to maker XQ? normal the

Okay.

bit the start bit. to QX. -- back a think to I'm little little actually one, So going go going I answer about talk time, QX I'm a to in

You September, tell will utilization sort maker and what timing but shape the was conference of last was too called about that our it remember was on bottom of at recovery. we talked that -- to panel quarterly we call, early in

As we with in we a X, we maker And entered panel increase what panel models in would to we recovery were seeing -- in the utilization into industry, and that throughout significant that and underway price maker that were quarter and increase meant significant was saw for in through in our increases arc and telling then us adjusting year. the this another October panel utilization November. continue in information, along after order behavior seasonality recovery QX upwards

delayed quarter approach changed panel to about really continue at October, levels rather we back us the sort looks the we recovery about sort to to of than pandemic, seasonality. its China level maker would way a it when the step tend we in to saw think look next it it, December, of for In And adjusting saw that reduced up January, they then is its utilization the off. is as like we as

that retail your piece. And to ties then

market. below maker production -- as expect depressed this the shared panel So the the level end now that even see utilization in is to rate set demand Ed year we relatively with of through grow would you, because the we UT

be state part the And demand at market pretty we the the on. growth result level. as for question, is relatively next much, to of given in of would significant year goes the to recover even panel us it retail expect doesn't the utilization, year-over-year, which set flattish glass still maker see will us your have takes Which to

Shannon Credit Suisse. from next from our And will question Cross come

wanted can talk and the Hemlock, that with sort of this opportunity about you I a was the long-term quarter. IRA? Wendell, the polysilicon see trajectory, an bit for outperformer to especially which talk you about

there you're maybe for about leverage Ed, And Because scale as the of you assume could the segment? talk there's able I margin of you to a utilize capacity have? that's fair excess amount would then manufacturing this potential that some

take product about we'd and the here Shannon, now different to too IRA, forms. could business to It's grow see make of for build solar profitability it right given of But the this for specific us at goal, our $X both So we like to any the and variety company, billion us business. many announcements. opportunities enhance a early

margin within add there. corporate similar would One, the gross That's product got Again, business sort more in overall half of our got X Hemlock's those Shannon, Hemlock same things. in semiconductor or in both to is sets you've sort So solar, of circumstances, average I and growth is zone normal our you've right? the and all emerging segment.

because And was, to We we the capacity was added very we back second described, is it thing I have would that previously which on. inexpensive add then solar capacity as mothballed. were able turn it

that as around some we of be gross of Corning. as may some may phases just impacts think current and costs margin there the that for in, journey. along next But the go it do be growth, to it's the state about think we there As average in to

from And Fox our next question Advisors. from Fox Steven will come

standpoint productivity what and improvements talked you exactly doing about what year? in were involved were this the or both implies and you side destiny ratio to should what was maybe your the of explain terms there from I tough that your on adjustments a kind the can near-term maybe remain control markets end wondering it costs just you for cost if own of ability

to the were of being one about we serving to disproportionately our Maybe right? way was side And priorities Thanks, able Yes. that, about talk do them Steve. customers. through our as of it is think erred what pandemic, we the on the

the customers time, And we ensure what raise do when our products to that needed did customers, products in, beginning, the offset of the be need sort difficult ship all starting have inflation we difficult in 'XX materials production able you difficult factories, very to environment in was long and got sweep have we over was need the very to we made price in whatever a In a very we to your in where similarly, and to needed through were to the supply of this and coming make able sure able running the staff available we space, chain over they time you pandemic that that. to being our environment end.

get yields, able we our improve some levels or the be historical our our in operate, us allow we we've take back some improve capacity metrics. benchmark to to adjustments realign So and our cases, to staffing been productivity would and consider what to our improve way

the right have we the cost every factories. of sure making our output at right So all in at level

there action not yet, that will our a significant improve of objective. made in quarter, gross That's cost We're progress the more a amount improve our but we've fourth we've therefore, lot margin. our and completely and taken

And implications longer-term that? just for all

will longer think it impacts things, the able customers are that the change did back be has us being which it, humble, term, right? almost our operate way of we all think including you supply I at of our have pandemic, humble during in this and gets suppliers. Pre to I least clearly Well, operated pre-pandemic, here to lot us surprised we like if about chain been China it by and a we recent disruption, the

us pre-pandemic our margin are allows now demand as we our we like to and back like feel comes levels, I our aside, able to then to get did grow that putting more back run levels. But closer should historical which

will Josh from from next come Spector UBS. question Our

now? over specialty. on way in this that the XX content market Is there new metric year? shared next the what than greater almost about wins I you points percentage So 'XX. pace of was 'XX you would based a just in look grew think to you know How in curious

launches. content, We model products new have for new significant to be begin introduced a value-added upcoming will number that of

have to we expect dynamic more sort of happen again. So Corning a would

adoption actual the really innovations. upon of and success Now of the of will degree pace new depend overperformance those

So I'd add product numeric would see like sort characterize how both this before does of customers' to I using our technology products does a specific of unique outperformance. our level

just follow And I up side of Okay. the things. if on cost could

strategies Is energy there we flowing your talked the for guys your otherwise anything of productivity. considering hedging you you So differently years? about or through given over past couple be should

year, to have business. the shared back the go to the respect we sort price of to be XXXX. things continue of that neutrality we've on get to Yes, our little to think sort costs inflation, sort throughout to Josh, as are allowing we us surprised half, I close a with primarily consider input all I run of negative we the we as and increases bit to as our to Things into normalized think come

to pre-pandemic Energy as of pre-pandemic is by and, to the we're I do inputs. some even think levels in the mean slowed other I of though that not costs, rate costs inflation remains relative levels, way. certainly elevated a back for cases, retracted, has cost many

So but I that certainly XXXX. watch, it's as specific go out nothing is -- one into energy call think to I'd we

-- quarter in -- actions with been from quarter the to or X able our pretty we that think, to I to have in that's that able which the like of looking able been significant. We've in in Josh, is experienced, inflation rearview one the fourth the sequentially catch took profitability up to we we're that up we've mirror. the quarter, we're X. And the reasons have step

where area about, of the in of from asking and us think of to work what is it, the still getting do which us Got We're is supply some that. coming you're standpoint need see we sort who's have an I to inflation team great I we on really ahead how what's we more, think accurately chain there working a through to Josh. improve game. still do help trying but at

Tim next from come Our will from Long question Barclays.

the X-parter of a ask business. Yes, I'd coms kind to optical like on

kind the was that part First, quarter last of it large side. quarter, one felt through carrier like It the weakness. mostly was of the on revenue like or

looked cloud Now lot like more worried of are folks quarter, was of year. a kind a enterprise in weak seems like the and distributed. about spending It it's it little next into

big Is X that So mix can you pretty was cost component there. there just differently or you or just kind dip in Could then talk going bit a profitability that? of secondly, about the quarter. is enterprise profitability a There's something talk telco weak dynamics you And on? the how the markets? about there see in maybe else little those obviously, in

and it supply think projects space, one or what in had who So we other. their just I've But player. it chains were said doing was their way -- of I who a to was have the would to been other number this the that manage carrier perhaps any also is pacing always carriers players one said relative industry they've

had But of of quarter rest go still levels benefit through a demand elevated think and is as as -- through that get we this we we're we then of And well. we year. X activity the the as clouds Yes, large, a work ton and by the carrier story. expect go to through

one, or take Yes. one cost the I'll margin And profitability one. the

of think Opto optical. depressing the the in of about, margins of a is we've productivity impacting significantly, the talked example I inflation things segment significantly. impacting things are Those levels segment sort all good

also impacted came And we of took the fourth the all down down, things and quarter optical. our in And inventory in fourth volumes also those quarter margins.

good we've things sort about. example it's of of all So a talked the

the we've actions However, as on about the positive well. impact optical significantly talked side,

would a So to place as expect where we go into we that's improvement. XXXX, profitability see

Matt next come will Bank. Our Deutsche from from question Niknam

One, maybe X could. I bigger Just if picture.

about is you any in EPS maybe I'm think we year, thinking use at share implied a getting is be to onwards? Is $X get As visibility framework you annualized to maybe EPS, $X.XX midpoint when what in towards run sort for start about any EPS the a there think, And the trajectory when really about to I to the slower have XQ XQ. of back a at rate?

year? any bounce a then back last just this XQ? a when inflections then have And or Optical, you the On in activity maybe more seen resumption And you follow-on would question. to of meaningful maybe anticipate

effective, that expect actions of we're that that's EPS type your it. our tried pricing that's talking which EPS So they sort That's at X, our that revenues X actions should question, in rate sort we're have they a on is with to level, we rate when you're level. way way X, the that believe productivity run Did quarter it, $X like be you answer that to that and about to hit revenue when the if are when question, profitability we've we what that's X,X, about, of run Then, first do of with are. that and are sir? modeling to the thinking level. that That's

on or XQ? That does. bounce That does. back have you And resumption Optical, any yet just of in then seen sort

lot like able We're what is this talking very should watching Quarter all timing. their call We're how time get month our So customers. no me close X to We're another let be them it, right? they're tell project and to optical, to doing. with or looks. we on a X into you

communications, did just the price increase most planned the associated we of idea optical this executing which business. successfully, finished increase an you perhaps years demand it And not XX-plus price most extent of significant being gives in with perhaps, and we my -- significant the of in

next Asiya Merchant question from Citi. from will come Our

But just on free cash flow, Ed.

lot guys light on Just asked you -- I Can flow questions in know the free margin some shed you post been of flow how and have on 'XX? levels revenue, sales adjusted a think cash about and improvement. your cash

about similar sort operating build. to was saw our the what that we similar CapEx in the in impacted prior to I XXXX, year our the the that XXXX we expect most Asiya. $XXX of I of XXXX sure, hold year. in shared mean as really to that view Yes, was I on capital, as million inventory built you flow think did I and We cash well. And inventory think

our negatively impacts that operating flow. obviously, cash So

small holding building the flow other fourth to way. make going not step forward. flat We inventory, in is just cash quarter here. helps goal our inventory And Our go made the inventory a even

and that the primarily goal free space. CapEx go But our to cash able up, in to go is keep make it's to got cash our our inventory flow So we've be make operating do to flattish, and up. so work should flow that, do

share a in think know Okay. of we pre share we how you expecting dividends. How -- -- lot repurchase about I an here? like 'XX? resumption think should in buyback dividends And are about in about increase talked the should you

a return that priorities cash of we then to That's say are investing sort of for Yes, our not do guide course, going to dividend. organic for shareholders. us. there's out flow, what buybacks growth, plan We we will on the specifically. priority We I'm there. continue want we then, important But and to do would the lot And shared opportunity believe to I and that. operating of to are what our is highest cash to

back April outstanding I'm we're will -- still we'll of is preferred of us. got XXXX of of still We've tranche X% our a we buybacks, in XXXX with to then should that about and for behind did sorry, more As a reminder, that remain sort Samsung's very -- conversion bought in buyback And that large We shares, their us course, important. And paying for give pay one XXXX. have that. of That flexibility. more shares.

time. of out we're think I Operator,

thank So I'm us for down I everybody shut today. for just to going us. to joining And want

XXth Telecom Tech close, Media I we'll X. March Conference. let the March going Morgan you Group Stanley And to we're want to on Conference Susquehanna Before Financial we the on and be Technology X, know attending Annual that attend

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for that thanks concludes Operator, again, once joining So us. our call.

all lines. You disconnect can

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