I finally had a chance to catch up on Corning’s Q1’23 earnings call with analysts, and tried to capture some tidbits of information on the display business. Corning’s display business experienced a 3% QoQ decline in sales due to a slight decrease in both volume and glass price. In the call, Corning said that it believes volume will increase significantly in the second quarter as panel maker utilization increases beyond correction levels.
| (in $millions) | Q1’23 | Q4’22 | % Change | Q1’22 | % Change |
| Net Sales | $763 | $783 | -3% | $959 | -20% |
| Net Income | $160 | $171 | -6% | $236 | -32% |
Panel maker utilization dynamics have been affected by pandemic-related disruptions in China. Utilization began to increase from its low point at the beginning of Q4, but it leveled off in December and declined in January due to the disruptions. However, conditions in China improved in March, and panel makers increased their utilization. Corning expects panel makers to run at higher utilization levels in the second quarter than they did in the first quarter, leading to a significant increase in sequential glass volume.
Corning believes that new innovation opportunities and emerging technologies like augmented reality and bendable devices will contribute to long-term growth. According to the execs, Corning is collaborating with LG Electronics to advance in-car connectivity and solve more of its customers’ challenges in design, connectivity, and autonomy. I am pretty sure the references to AR were a bit throwaway, but automotive is, as expected, a growth opportunity.
There isn’t really much insight here that hasn’t been delivered ad nauseam everywhere someone says the words panels and utilization in the same breath. Although, I would say, the general tone wasn’t upbeat, more hopeful, and the running dogs of capitalism listening were probably not convinced either if the company’s share price is anything to go by. However, it is also fair to say, Corning is not suffering or benefitting any more or less than any other display adjacent company. Everyone is in the same boat, and the damn short term emphasis on quarterly financials does nothing but create fear and loathing. It’s a downturn, people will buy displays, markets will stabilize, as Arby’s has the meats, Corning has the glass, and this too shall pass. I kind of feel sorry for the people who have to give these presentations to Wall Street then I look up their pay packages and stock options and say, nah, they good.
