Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Corning Incorporated (NYSE:GLW)

Q1 2008 Earnings Call

April 29, 2008 8:30 am ET

Executives

James B. Flaws - Vice Chairman and Chief Financial Officer

Wendell P. Weeks, Chairman and Chief Executive Officer

Analysts

Mark Sue – RBC Capital Markets

CJ Muse – Lehman Brothers

Nikos Theodosopoulos – UBS

Steven Fox – Merrill Lynch

Curtis Woodworth – J.P. Morgan

Jeff Evanson – Sanford Bernstein

John Harmon – Needham & Company

Ajit Pai – Thomas Weisel Partners

Carter Shoop – Deutsche Bank

Operator

This is the Quarter 1 Earnings Conference Call. At this time, all participants are in a listen-only mode. During the question and answer session please press *1. Today’s conference is being recorded. If you have any objections you may disconnect at this time. Now, I’ll turn the meeting over to Mr. Ken Sofio, Division Vice President of Investor Relations. Sir, you may begin.

Kenneth C. Sofio

Thank you Jan and good morning. Welcome to Corning’s First Quarter Conference Call. This call is also being audiocast on our website. Jim Flaws, Vice Chairman and Chief Financial Officer will lead the discussion, and Wendell Weeks, Chairman and Chief Executive Officer will join us for the Q&A. Before I turn over to Jim, today’s remarks do contain forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. These statements do involve a number of risks, uncertainties, and other factors that could cause the actual results to differ materially. These risks are detailed in the company’s SEC reports. Jim?

James B. Flaws

Thanks Ken. Good morning everyone. This morning we released our results for the first quarter which can be found on our investor relations website. In addition, for those of you with web access, we’ve posted several slides that will summarize the important data from this morning’s prepared remarks. These slides will be available on our website after our call as well. Overall, our first quarter results were excellent. Let me share with you the key data points and then we’ll get into details. Demand for LCD glass was very strong throughout quarter 1. Both our wholly owned business and Samsung Corning Precision ran at full capacity. Panel makers ran at high utilization rates throughout Q1 and panel inventory levels were healthy coming into quarter 2. NPD data shows retail sales of LCD televisions in the United States continue to be very strong with year-over-year growth each month through March. Although we do not claim to be recession proof, we clearly have no evidence of an economic downturn impacting our Display business. Based on the current strength in the Display market, we now believe the LCD glass market volume will grow towards the upper end of our 25% to 30% estimate for the year.

Now, let me turn to the details starting with our income statement. Our first quarter sales were $1.62 billion or at the top end of our guidance range. More importantly, first quarter sales were 24% higher than a year ago. EPS excluding special items was 44 cents and slightly over the top end of our guidance range. This represents a 57% increase over our first quarter EPS, excluding specials, of 28 cents a year ago. Net income excluding special items were $702 million, an increase of 55% over last year’s net income, excluding special items of $452 million. You should know that EPS and net income excluding special items are non-GAAP measures. The reconciliation to GAAP can be found on our website. Our first quarter benefited from strengthening the Yen to US dollar exchange rate. Yen averaged 105 in the quarter compared to our original quarter 1 guidance of 109 and 119 in quarter 1 of 2007. This change benefited our EPS by about a penny and a half and our sales by about $25 million compared to our guidance versus last year our first quarter sales benefited by $120 million and EPS by about 4 cents due to FX changes.

Continuing down the income statement, gross margin in the first quarter was 52%, a new record for Corning. Improvement was primarily due to excellent manufacturing performance in our Display segment. SG&A was $242 million and 15% of sales as expected. RD&E in the first quarter was $151 million or 9% of sales. Other income was $1 million in quarter 1 compared to $44 million in quarter 4. Each quarter, the movement of certain balance sheet accounts with fluctuation in exchange rates and the offsetting impact associated with hedging programs are captured in other income. Sequential decline in other income expense reflects this significant volatility in exchange rates in Q1, especially the Yen to Dollar exchange rate, and essentially offsets a portion of the positive effect of exchange rate movement on our sales and margins. Royalty income which is the most significant portion of other income was consistent quarter 4 to quarter 1. Equity earnings were $304 million in the first quarter compared to $267 million in the fourth quarter which is an increase of 14%. As a reminder, fourth quarter equity earnings included net special charges at Samsung Corning CRT of $14 million. Our tax rate in the first quarter was 14% as expected. And wrapping up our income statement, our share count for the first quarter was 1.6 billion shares.

We had one special item in quarter 1 related to Pittsburgh Corning bankruptcy. We have made significant progress negotiating a revised plan regarding the Pittsburgh Corning bankruptcy proceedings. Its progress and the proposed new structure have led us to record a gain of $327 million or 20 cents per share as we’ve reduced our estimated liability from about $1 billion to $675 million. Although the revised settlement, if approved, will give us the option to use cash or shares of Corning’s common stock, the amount will be fixed in dollars and not by the number of shares. As a result, you will no longer see us recording a mark to market impact every quarter as we await final quarter approval. I will also say it is our current intention to use cash to fund this liability. All sides continue to work towards the new arrangement and we’re hopeful final agreement will be reached soon. We’ll keep you posted on our progress. Including this special item, our first quarter EPS was 64 cents per share.

Now let me turn to our segment results for the first quarter. I’ll start with the Display segment which had an outstanding quarter. First quarter sales were $829 million, 7% higher than Q4. Volume was up 2% sequentially and price declines were in line with previous quarters. Given the continued strong demand throughout the quarter, our operations ran at full capacity. Segment sales also benefited significantly from the strengthening Yen during the quarter. As a reminder, all of our glass is sold in Yen. Pricing guidance we provide is on a Yen per square foot basis. As a result, changes in the Yen to Dollar exchange rate do not directly impact our pricing. Business had excellent manufacturing performance in the quarter which resulted in higher gross margins. Due to continued strong demand, we were unable to build glass inventory in the quarter. Equity earnings from SCP’s LCD glass business were $203 million in the first quarter, an increase of 15%, versus $177 million in quarter 4, driven primarily by the favorable exchange rates, excellent manufacturing performance, and a lower tax rate. SCP’s sequential volume was consistent with the first quarter and price declines were in line with the previous quarters. For modeling purposes, SCP first quarter LCD sales were $737 million compared to $708 million in the fourth quarter. Net income in the Display segment which includes equity earnings were $679 million in the first quarter, an increase of 16% compared to the fourth quarter. In comparison to the first quarter of last year, sales in our Display segment increased 58%, led by volume gains of 50%. Price declines were 8% and the movement of the Yen to US Dollar exchange rate was favorable. Equity earnings from SCP’s LCD glass business were up 81% over quarter 1 of 2007 led by volume gains of 46%. Segment net income grew 76% versus last year.

I’d like to spend a few minutes discussing the supply chain starting with LCD panels. General panel makers ran a high utilization rates throughout the quarter. Overall inventory levels of panel makers are currently at what we would consider to be healthy levels and well below quarter 1 of 2007. On the retail side, US retail data for January, February, and March indicate that LCD television sales were strong throughout the quarter and significantly higher than a year ago. Data we’ve seen from Japan and Europe indicate that retail sales in those regions have also met our expectations. Sales in China were affected by severe weather in February, but the March retail data was much higher than our expectations. In fact, March LCD television sales in China grew 87% over the same month last year.

I’d like to take a moment to walk you through some of the Yen market data for Q1. As always, I must stress that our first quarter market information is only preliminary at this time. That represents our view and is based on a variety of sources. Clear, the data I’m referencing here relates to shipments from PC manufacturers and television and monitor set makers to retails. We estimate they were approximately 23 million LCD televisions shipped in quarter 1. Compared to the first quarter of last year LCD television shipments were up 61%. Penetration of LCD television in the worldwide TV market moved from 45% in the fourth quarter to 48% in the first quarter. Despite the continued news about the US economy, it appears that LCD television sales were strong. We’d like to remind investors that historically TV sales are not usually impacted by recessions. Those who did not see the historical TV sales data presented in our investor meeting in February, we’ve included the slides here for your reference. In short, over the last 30 years, there have been three US recessions and none have impacted television demand. You have to go back to the recession of 1975 to find any meaningful impact, and even then, it’s difficult to compare to today’s market with one 35 years ago. First, there were only 30 million televisions sold versus over 200 million today. Second, the TV purchase back then represented more than 10% of an average consumer’s disposable income versus less than 5% today. Investors should also note the concerns about a potential recession have been around since last October, not just the last 3 months. Q4 retail sales for LCD TVs were also very robust and they were strong again in Q1. So, in summary, we’re not seeing the current US economic uncertainty impact the LCD TV sales.

Retail data also suggests that the notebook sales were very robust in Q1. About 31 million were shipped in the first quarter which was higher than our expectations. Notebooks are now 47% of all desktops sold, up from 39% a year ago. Starting to view notebooks as a disposable product, given most consumers keep them for just a few years now, supports well for glass demand. Moving to LCD monitors, about 41 million were shipped in the first quarter, slightly lower than quarter 4. I’d like to remind investors that one of the key data points we look at to gauge to help the supply chain channel is panel pricing. We’ve used sudden changes in panel prices as one potential indicator of the supply chain problem. Investors can obtain biweekly pricing data from a variety of sources. At Corning, we look for significant panel price declines within a short period of time. This could be an indication to panel makers and/or the set makers of building inventory which could signal slower demand further down the supply chain. Through April, panel price declines have been very moderate, especially on TV and notebook panels, and some erosion in monitor panel prices in March, but that was expected. You may recall that panel makers actually increase prices last year on wide screen monitor panels. For the first half of April, monitor panel prices actually increased.

I’d like to update you now on our Gen 10 facility. We continue to make excellent progress and are on schedule to begin producing Gen 10 glass samples for Sharp later this year. For those of you with web access, this is a recent picture of our new plant under construction. Investors have also asked us to comment on the recent equipment orders by several panel makers and their announcements to add panel capacity. You may recall our comments from last year when we said there was likely enough panel capacity for 2008 though 2009 looked light. We said investors should expect to see equipment orders and capacity expansion announcements from panel makers, and investors are seeing these now. Investors should note that these announcements are per panel capacity additions in 2009 and 2010. It takes almost 2 years to build a new fab, so the generally long lead time for equipment orders. And as a reminder, we base our decision to add glass capacity on our view of the end market demand, not panel capacity.

I’ll wrap up my comments on Display with some thoughts on the Beijing Olympics. This is a topic that resonates with investors as either a potential positive event or a negative one. We are more agonistic. We do not believe sporting events significantly change worldwide television demand, but we are cognizant that these sporting events can influence behavior in the supply chain. In fact, we believe the Olympics could shift a small amount of TV sales from the second half of the first into the second quarter, but not generate additional annual TV sales. As a result, we believe panel makers could receive additional TV panel orders in quarter 2 for the Olympics if they have not already. Panel makers are running at high utilization rates, so these orders may help them maintain those rates. More importantly, we don’t believe the panel makers have forgotten what happened two years ago for the World Cup, but for those who don’t remember, we certainly remind them. Investors should also note there is important distinctions between the World Cup panel inventory build from two years ago and this year’s Olympics related demand. First, panel inventories were much higher on weeks of inventory basis coming into 2006 than they were coming into 2008. Second, 2006 panel makers added these levels by building significant amount of inventory in January, February, March, and April in anticipation of May World Cup demand. At the beginning of 2008, panel inventories were very healthy and the panel makers have not had added fresh inventory in Q1. The other important distinction between 2006 and this year is the timing of the events. In 2006, the World Cup excess inventory had nowhere to go and distributors having very slow retail months of June, July, and August. This year, the Olympics are in August, so if there is excess television inventory, the industry will be heading into the traditionally stronger TV retail season. We’re not suggesting another that an over-build can’t happen; it certainly can, we are providing this commentary today so investors can understand the differences between events and the current market dynamics.

Now moving to the Environmental segment, sales in the first quarter were $197 million or 4% increase over fourth quarter sales of $189 million. Auto product sales were $137 million in the first quarter versus $131 million in quarter 4 and an all-time record. Auto sales were driven by strong seasonal volume in North America and Europe. Diesel product sales were $60 million in the first quarter and slightly higher than Q4. Heavy duty diesel sales were up 20% sequentially driven by higher US demand. Light duty diesel sales were lower due primarily to an inventory correction at a customer. Segment net income was $13 million in the first quarter compared to $23 million in the fourth quarter. In comparison to a year ago, Environmental segment sales increased 10% driven by higher auto and diesel volume. Auto sales were up 11% year over year while diesel was up 7%.

In the Telecommunication segment, sales in the first quarter were $421 million or 2% lower sequentially, which was lower than we expected. Strong fiber volume and higher fiber-to-premise sales were offset primarily by slow start on several customer projects. Sales of our hardware and equipment products were $207 million in the first quarter, a decrease of 5% sequential. Sales in fiber and cable products in the first quarter were $214 million and consistent with the fourth quarter. Fiber-to-the-home sales, which are primarily hardware and equipment related, were $76 million in the first quarter, an 8% increase compared to quarter 4. First quarter fiber-to-the-premise sales were driven primarily by the strong demand in North America. We also recently began selling our fiber-to-the-premise products to a second customer in Europe. Net income in the Telecom segment was $11 million in the first quarter compared to $12 million in the fourth quarter. Our new Clear Curve technology continues to gain market acceptance. We expect several additional customers to begin product trials in Q2. Regarding Concord, based on current order activity and forecast of the demand, we’re considering bringing additional mothball capacity into production. Investors hopefully noticed we began to separately report our Specialty Materials business as a separate segment. We hope you find the additional transparency to be helpful. Sales in this segment were $83 million in quarter 1 compared to $105 million in quarter 4. Decline was primarily due to lower sales of our advanced optic products. This segment generally has lower sales in quarter 1. In the Life Sciences segment, sales in the first quarter were $81 million, an 11% increase over quarter 4 sales of $73 million, and compared to a year ago, sales were up 7%. Investors should also note our other segments now include development spending including spending on our development programs such as Epic, Green Lasers, and Microreactors. About half of our increase in year-over-year R&D spending is on these programs.

Turning to Dow Corning, equity earnings were $80 million, slightly lower than fourth quarter. Silicone segment of the business performed as expected in Q1 with good broad-based global revenue growth of 12%. Margins were pressured earlier in the quarter by an upward surge in the price of few raw materials including methanol. The company was able to offset a portion of raw material increase during the quarter through higher prices. Regarding Hemlock, it is in the process of bringing on new capacity. We expect new production shortly. Investors should see some benefit in the increased capacity in Dow Corning’s results in Q2.

Moving to cash, we ended the first quarter with about $3.3 billion in cash and short-term investments. Free cash was a negative $172 million in the first quarter. This is fairly typical given the first quarter usually includes higher working capital outflows. Free cash flow is a non-GAAP measure. Regarding our stock re-purchase program, during quarter 1, we purchased $3 million shares of stock for $62 million. Moving to capital spending, we’re increasing our capital spending plan for 2008. We now expect to spend between $1.8 and $2 billion, up from our original estimate of $1.5 to $1.7 billion. The increase is primarily related to Display and driven by capacity additions, and precious metals price increases. Our original estimate for Displays spending was $800 million to $1 billion; it is now $1.2 to $1.4 billion. Part of the increase is driven by the need to meet a larger 2009 market than we previously expected. As a result, we’re moving up some of our 2009 capacity additions up to earlier next year. It takes us about 6 months to add a tank, some of this capital spending falls in 2008. We’re not prepared at this time to provide a new forecast for 2009. We’re still in the process of updating it. We do expect that the glass market this year will grow at the upper end of our previous 25% to 30% estimate. We’re also adding new tank capacity because demand for our Gorilla glass is growing. Gorilla is a proprietary scratch resistant glass for touch screens and other applications. Currently, our Gorilla glass is manufactured using existing LCD capacity in the United States. While glass composition for Gorilla is very different than LCD, it is made using the same fusion process. Since Display is running at full capacity, we need to replace the capacity being used to produce Gorilla. Investors should also note that the cost of precious metals has risen substantially in the last few months. Precious metals, mainly platinum were used in the forming process. Since the precious metals are not consumed in manufacturing, it is not depreciated. A few years ago, about 15% of the cost at a new glass facility was precious metals; today the cost is closer to 25% to 35%; so it’s a more material portion of our capital spending. Given our strong Q1 performance and even higher Q2 expectations which I’ll cover in a moment, we’re still on track to meet our original goal of at least $500 million of free cash flow this year even with this higher capital spending.

This is probably a good time to update you on our tax rate. Last summer, we believe, we began recognizing tax expense on US income no earlier than 2009. At our investor meeting in February, we told you that this could happen as early as this year. We’ve now completed updated analysis on the tax rates, and investors should not expect any major change to our tax rate in 2008. We think it’s likely that the tax rate will increase in 2009, and we believe most outside analysts have been modelling this increased tax rate for 2009. For modelling purposes, we suggest using a rate of 12% to 15% this year and 25% for 2009, and as a reminder, we will not be paying cash taxes in the United States for many years due to our NOLs.

I’d like to wrap up by providing our guidance for the second quarter. We expect second quarter sales to be between $1.71 and $1.75 billion. This would represent an increase of more than 20% over last year Q2 sales of $1.4 billion. Our second quarter EPS before special items is expected to be between 47 and 50 cents per share. This would represent a 38% to 47% increase over last year’s quarter 2 EPS excluding specials of 34 cents. Moving down the income statement, we believe gross margins will stay above 50%. SG&A is expected to be approximately 14% of sales and RD&E around 10% of sales in the second quarter. Anticipate equity earnings in the second quarter to be up 10% to 15%, driven by SCP and Dow Corning. Dow Corning equity earnings are expected to increase 15% to 20%, driven by the growth in the silicone business and Hamlock semiconductor. As I mentioned earlier, Hamlock’s results will begin to benefit from new capacity brought online this month. Investors should model approximately $40 million for other income expense. Regarding our tax rate for the second quarter, we expected it to be between 12% and 15%. And lastly, for your modelling purposes, you should again use 1.6 billion shares in the second quarter when calculating the EPS before special items.

Now moving to Display outlook, we anticipate our wholly owned business and SCP will continue to run at full capacity in the second quarter. Second quarter glass volume at our wholly owned business is expected to be up 2% to 5% sequentially. Compared to last year, glass demand will be up 28% to 31%. We know several analysts who had Q2’s sequential volume expectations of 6% to 7%. These same analysts have modelled no growth for Q1 versus the 2% growth we achieved. So, we add the quarters together, the second quarter absolute glass volume is at the level they expected. SCP’s volume is expected to grow between 8% and 13% sequentially or up 32% to 38% compared to last year. As a reminder, growth rates can differ by geographic regions since they are based on order rates and the timing of capacity additions at our customers. When you combine Corning and SCP, we expect Q2 volume to grow 6% to 9% sequentially. It’s important for investors to note that our growth estimates for Q2 are higher than the original expectations we had for this quarter earlier this year. And regarding glass pricing, we expect price declines to be consistent with recent quarters at both our wholly owned business and SCP.

To wrap up by outlook comments on display, all lights are green. We and SCP are running at full capacity. Our customers continue to run at high utilization rates and inventory of the panel makers is healthy in the aggregate. Panel price declines have been very moderate to date suggesting good sale through of panels to set assemblers. The retail data was current through March and we are seeing no evidence of the US economy impacting LCD TV sales. We anticipate the LCD glass market volume growing to the upper end of our original estimate of 25% to 30%. Glass price declines are expected to be moderate for the remainder of the year, and several panel makers have already asked us about supply during the year 2009. More importantly, as evidenced by our manufacturing performance this quarter, we continue to make excellent progress reducing our costs. We remain confident of our ability to continue to reduce cost further.

Now we’re often asked by investors if LCD glass volumes will have normal seasonality this year. Our response has typically been that this industry is so new and is growing and changing so rapidly that there really isn’t a pattern established. As you know, we give guidance one quarter at a time. However, last year, we experienced some volatility in our stock price as investors were making seasonality assumptions for quarters beyond our guidance time. So, we’d like to provide our current thinking, and I stress current, about how the remainder of the quarters will cycle. When we entered the year saying that we felt glass market growth, and I want to stress glass not panels, would be up 25% to 30% for the year. We’re now saying that if we continue to see no impact with the US recession, glass market will be at the upper end of this range. We already used 30% growth for the total year. We would expect 22% of the glass market volume this year to be in Q1, 24% in Q2, 27% in Q3, and 27% in Q4. I want to stress this as the total market, not Corning and SCP, and obviously, we’ve rounded to even percentages. Lastly, this is a forecast. We hope the information is helpful to investors. For your benefit, last year’s pattern; in Q1 was 20%, 24%, 27%, and 29%, and to remind you that last year’s market growth was a larger percent, but similar square feet to this year’s estimated growth. We are seeing a slightly different pattern in 2008 and 2007. The difference in the pattern this year is due to glass and panel demand being stronger earlier in the year to better utilize tight panel making capacity to address peak end market demand in the second half, and as you’ve seen in Q1, we did not see panel fab utilization fall from Q4 like we did in Q1 of 2007. We use a very complex model to develop our cycle. I want to remind investors that inventories can exist at many levels within the supply chain. They can influence the shipments of this industry.

Now, turning to Telecommunications, we anticipate second quarter sales to grow more than 10%. Growth will be driven by significant fiber-to-the-home demand and the number of customers as well as the startup of several private network projects. Fiber-to-the-home sales are expected to increase over 20%. In comparison to Q2 of last year, we expect Telecom sales to grow at least 8% excluding the impact of divestitures. We anticipate Environmental segment sales in Q2 to be flat to up 5% sequentially. Segment growth here will be driven by heavy duty diesel shipments to China as they retrofit anticipation of the Olympics as well as the modest improvement in United States. Despite this improvement, we expect Class 8 truck engine production to come in at the lower end of our previous estimated range of 175,000 to 225,000 engines this year. As a result, we now expect diesel sales to grow 15% to 20% this year versus our original expectation of at least 25%. In light duty diesel, we expect shipments to several new European platforms. Auto sales are expected to be lower in Q2.

In our Life Sciences segment, we expect sales to increase slightly, especially material segment sales to be up 20% sequentially driven by increased demand for advanced optical glass as well as our new Gorilla glass.

One note on the impact of foreign exchange rates on our guidance. Our second quarter guidance is based on a Yen to US Dollar rate of 103. The Yen to Dollar rate would average 2 points higher or lower in the second quarter. We estimate our overall sales and net income after tax would be impacted by about $15 million. Investors should remember also that the Yen averaged 105 in Q1, so if it does average 103 in Q2, our Display sales benefit by about 25 million. Ken?

Kenneth C. Sofio

Thank you Jim. Jan, we’re ready to take some questions now.

Question-And-Answer Session

Operator

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press *1. To withdraw your question, press *2. One moment please for our first question. The first question comes from Mark Sue of RBC Capital Markets, your line is open.

Mark Sue – RBC Capital Markets

Thank you. It’s RBC. Just considering the positives glass data on the first half and some moving parts in the second half and your thoughts of adjust to seasonality, are you considering the additional capacity coming on from your competitors or you’re just factoring in your productions so that we don’t potentially have excess supply during the back half?

James B. Flaws

I didn’t totally follow your question, but we do look at our competitors, their announcements, and what we think their expectations with capacity coming on, and we see no fundamental change in their plans versus our expectations. So, generally, we think that the glass industry is by and large growing capacity about the rate of what we think the Yen market is.

Mark Sue – RBC Capital Markets

Got it. And Jim, so to be sure we’re not expecting a down sequential September quarter, it’s more moderate with sequential growth, is that how we should look at it for Corning?

James B. Flaws

That’s correct.

Mark Sue – RBC Capital Markets

Okay. And lastly, just on gross margins, lot of improvements there, any thoughts on the rate of gross margin improvements – it seems you’re recognizing a lot of efficiencies.

James B. Flaws

We’re delighted with gross margins being where they are, and frankly, I’d love to keep them at this level for quite a long time.

Mark Sue – RBC Capital Markets

Okay, thank you gentleman. Good luck!

Operator

CJ Muse of Lehman Brothers. Your line is open.

CJ Muse – Lehman Brothers

Yeah, good morning. Thank you for taking my question. I guess I wanted to probe a little bit deeper on the gross margin side – it looks like your net margins were up about 500 basis points on Display suggesting maybe 200, 300 improvement on the Display side – is that in the right ballpark?

James B. Flaws

Our gross margins did improve in Display, we’re not giving the absolute number.

CJ Muse – Lehman Brothers

Okay, I guess in terms of the overall strength Jim, was Telecom in there as well or was it just Display that drove the uplift.

James B. Flaws

It’s primarily Display; Telecom was actually a slight contractor for us in Q1.

CJ Muse – Lehman Brothers

Okay, and I guess, lastly on the line of gross margins, do you think that that level or close to that level is sustainable throughout the year given your visibility to ongoing cost reductions?

James B. Flaws

I think we’ll be able to maintain the high corporate margins and Display margins during the course of the year; of course in any given quarter, we can have changes as we cycle through various maintenance and other things, but if pricing remains moderate, glass demand as we’ve expected, we expect to have a very strong year for Display gross margins.

CJ Muse – Lehman Brothers

Okay, and I guess moving on to your raising the volume to the high end of the range, three months ago, you gave us a 25% to 30%, what has happened in the last 3 months to give you confidence that it will be the high end – is it your view of panel shortages, is it that you’ve contracted glass through the second half of the year, can you provide a little bit more color considering the macro backdrop that we’re seeing?

James B. Flaws

It really is what we’re seeing at retail that we continue to see very strong demand, obviously when we gave you 25% to 35%, we had some assumptions based on what we thought would flow through; it isn’t all just the supply chain, but it is actually end-market demand, and now three months into the year, and what appears to be the challenging economy for people, yet the demand remains very strong worldwide for LCD television, so that’s what is leading us to be moving it up to the 30% level; it’s really our view of end-market demand.

CJ Muse – Lehman Brothers

Gotcha. And the last question from me; on the other income line – I came in a little late – you talked about royalty revenues being sustainable – what drove that to being flat, I guess, in Q1?

James B. Flaws

It really is based on the primary thing there on royalty, it is really from SCP, and obviously they didn’t have real volume growth there; so as they see volume growth, we see royalty income will grow more in tune to what their revenues are.

CJ Muse – Lehman Brothers

Right, but I thought you guys reported $1 million of other income?

James B. Flaws

Yeah, and that’s a whole bunch of things in there, so that’s the net of other income, other expense, and we had some other items in there, particularly we had some losses on FX hedges related to the balance sheet hedges that we put in place with the extreme volatility we saw in the month of March and also that our balance sheet itself turned out to be a little different than what we originally expected. We thought we were hedging – that we had some FX losses of about a penny in there, so there was that and just some miscellaneous and some minor expense, but nothing significant on an ongoing basis.

CJ Muse – Lehman Brothers

Great, very helpful thank you.

Operator

Nikos Theodosopoulos of UBS, your line is open.

Nikos Theodosopoulos – UBS

Yes thank you. I have a couple of questions. On the gross margin for LCD, you gave Jim the impact on net income on the Dollar-Yen exchange rate, both sequentially and year-over-year, which is quite helpful. Does that also flow through gross margin? In other words, is that where you see it on your income statement? And if so – or if only part of it’s there – what’s happening to gross margin in LCD sequentially and year-over-year if you strip out the currency movement?

James B. Flaws

We have two currency impacts on the gross margin – one is obviously overall translation of the absolute number which is a benefit therefore. Some of the impact that I talked about is falling at gross margin – that’s obviously where we make our money. Then also, we got a little bit of improvement in the margin percent by how it fell between the combinations of the British currencies that our costs are based in, but are not all identical with our sales in Yen. So probably approaching one percentage point of our corporate gross margin came from FX improvement.

Nikos Theodosopoulos – UBS

Okay. Alright, that’s 1% - you are referring to the sequential change.

James B. Flaws

That’s correct Nikos.

Nikos Theodosopoulos – UBS

Okay. So if you look at the operational aspects of the LCD business, it sounds like it has still improved sequentially – just maybe a part of it was currency, but you still had some operational improvements. Is that fair?

James B. Flaws

That’s correct. We had outstanding manufacturing performance in Display, obviously reaping the benefit of running full which as we’ve told you many times is key to us for our success. We continue to reap benefit from Eagle XG. You may recall that even though we’re fully converted in their wholly-owned business, we’re still exploiting the benefits this glass gives to us. So, we were delighted by our manufacture in quarter one.

Nikos Theodosopoulos – UBS

Okay. And just a quick question on Telecom. Your commentary about projects being slower in the first quarter – can you elaborate on that? Was that a global phenomenon? Was it one or two customers? Just trying to understand what happened there and why do you think it comes back in the second quarter? Thank you.

James B. Flaws

Well, Nikos, it’s in two segments – both public network and private. Let’s deal with public first. The good news is that we are developing new fiber-to-the-premise customers, especially in Europe. But there’s some regulatory uncertainty into the mix here. The EU has commented that they’re not going to have their final decision until October, and this has caused some of the new fiber-to-the-premise customers that we’ve yet to announce to delay a little bit on this startup. We’d expect that to stay relatively delay here to the first half. On the premises side, it’s just major data center projects here and there, and those are to timing related, I think the fiber-to-the-home ones are also timing related, but I think we’ll get the uptake in Quarter 2 primarily from the premises stuff as well as the strength we’re anticipating in fiber-to-the-home and some other regions. So, overall, we feel our operations guys feel really good about the fundamental strength here and they view the Quarter 1 moves more as a noise than any sort of fundamental signal.

Nikos Theodosopoulos – UBS

The delay in the premise going into 2Q is not tied to any potential new products you might be coming out with, and the customers are pausing. It’s not tied to that, it’s just tied to their own…

James B. Flaws

Yeah I think it’s just tied, a big complex projects, when you ship them, etc., because we don’t see anything really significant driving their behavior.

Nikos Theodosopoulos – UBS

Okay, thank you.

Operator

Steven Fox of Merrill Lynch, your line is open.

Steven Fox - Merrill Lynch

Hi good morning. Two questions please, first of all on Dow Corning; could you talk a little bit about the sequential change in the coming quarter – how much is exactly due to Hamlock as opposed to the core silicone’s business and has your outlook on the core part of Dow Corning changed at all with the economy, and then I’ll have a followup?

James B. Flaws

The majority of the increase in Quarter 2 was coming from the Silicone’s part, I mean Hamlock will go up but the ramp has just started, actually as we speak right now, so there isn’t that much that is coming on. We’ll see greater benefit from Hamlock in Q3 and Q4, but really is in the Silicone’s business. We have not seen really an economic impact on Dow Corning’s silicones at this point in time other than the obvious certain industries that they sell into, for example, like construction, but you have to remember that their business is very much a worldwide business – I mean when we think about, it is not perfect per sense, but basically a third Asia, a third North America, and a third Europe, and so in some places they have seen some slow down, but overall, the volume is looking fairly good as we actually now know where we stand pretty much at the end of the month of April.

Steven Fox - Merrill Lynch

Great, and then just one more question on the gross margins – Jim with your outlook of greater than 50%, what are the risks to gross margins not being flat in this quarter given that you have higher unit volumes in the LCD glass business?

James B. Flaws

It really is the mix of Telecom which is obviously a lower gross margin. It would be maintenance on tanks, those would be the potential downsides to it, so the upside is continued very strong volume and good running in the LCD business. Diesel is perhaps a slight drag because we just don’t see any pickup at all really in the heavy duty truck business, and we obviously anticipated having more demand there.

Steven Fox - Merrill Lynch

Great, thank you very much.

Operator

Curtis Woodworth, of J.P. Morgan, your line is open.

Curtis Woodworth - J.P. Morgan

Hi good morning. In terms of Hemlock, can you comment on what capacity you expect to bring online this year? Is it still the 3000 tons and is it right to think that most of that comes online in the third quarter.

James B. Flaws

I think officially we stated going to a run rate of 14.5 on metric tons. I think it’s possible they could do a little bit better than that. It’s all on by the end of the year, and you really start to see substantial impact in Q3.

Curtis Woodworth - J.P. Morgan

And what would your capacity plans be for 2009 for Hemlock?

James B. Flaws

It may go up to 17.5 as a stated number. They’re obviously trying very hard to bring it up earlier if they can, and but that’s the stated growth that they’ve given out publicly.

Curtis Woodworth - J.P. Morgan

And I think you’ve commented that a lot of your capacity has already been pre-sold, is that prices – in terms of thinking about an ASP for that volume, should be relatively kind of flat – looking out this year and next year, or should you see some price benefit?

James B. Flaws

We really don’t get much price benefit, actually we have a negative pricing Quarter 1 because some of the capacity we’ve brought on earlier we now had to switch over to contracted pricing and there actually was a margin to pressure on Hemlock in Quarter 1 versus Quarter 4, and we’ve always known that it would be coming. By and large you won’t see much change of pricing going forward now. Almost everything that comes on is all under contract. The only time we get the advantage of spot prices is when it comes up early and obviously they recognize that, so when we can we try to bring it up early, but generally, our future is kind of known in terms of pricing at Hemlock. By the way it remains a very good business at these contract prices.

Curtis Woodworth - J.P. Morgan

Yeah for sure, and in terms of the global market, is it still extremely tight and do you have any opinion on other players that made announcements and players that are going to bring on pretty sizable amounts of global capacity over the next couple of years – just curious to see how you think the supply-demand balance is going to play out in the near term and maybe 2 years from now.

James B. Flaws

Our point of view is that demand for poly remains very tight and will remain so for several years, and I think you’ve seen a series of announcements even from respected players in the industry having trouble bringing up new capacity, and this is really hard to do. In terms of people who have never brought up capacity, they remain in a lot more announcements than reality there. There have been some of them who have started up production, but demand continues to be very very strong unless you see some change statement in either tax subsidies in various places around the world, oil dropping down below substantially, and no one is being worried about carbon footprint. I don’t think you have to worry about poly over-supply until towards the end of this decade, and it’s at that point in time that you could come into a point where there is more capacity than demand. I hesitate to call that too accurately given that this is marked and is growing at over 30% per year, but that would be the concern, and that’s one of the reasons why we structured our contracts the way we did.

Wendell P. Weeks

And to build on that, as I think you know, it’s one of the reasons that we ask our customers who are the most established players in the business to literally give us the billions of dollars that it takes to do this capacity, and in return we give them long-term supply contracts at established prices, so we feel pretty good about the risk positioning in this business at this time.

Curtis Woodworth - J.P. Morgan

Right, and one last question on SG&A – you know it’s down 140 basis points this quarter in 1Q, and I think almost 300 over a 2-year period and then your second quarter guidance of 14% is almost a 200-basis point year on year benefit – do you think you can continue to see that type of SG&A leverage in the business? Are there any FX considerations there and what are your thoughts going forward?

James B. Flaws

So I just would point out I think you’re on one element, I mean clearly FX is a little bit of a benefit – the Yen was at 119 a year ago and 105 in quarter 1, and most of our SG&A expenses are in dollars, they are not in Yen, so we get some benefit of that on a percentage basis. That being said, we are continuing to maintain our fundamental approach to this which is excluding FX changes it is our goal to let SG&A grow no more than half the rate of our real sales increase, and that’s the goal and the commitment that we’ve made and think we can continue to do that certainly for this year.

Curtis Woodworth - J.P. Morgan

Great, thank you.

Operator

Jeff Evanson of Sanford Bernstein, your line is open.

Jeff Evanson – Sanford Bernstein

Thank you. What is currently the Eagle XG mix at SCP?

James B. Flaws

Currently it’s more than half of the volume.

Jeff Evanson – Sanford Bernstein

Great, thanks – unrelated question – you mentioned that you had won some new light diesel platforms in Europe, wondering if these are at the same manufacturers you currently sell to or if these are new manufactures?

James B. Flaws

Both, but also some new light duty diesel customers.

Jeff Evanson – Sanford Bernstein

Great, and in Europe, diesel enjoys on order of 50% of passenger car and overall light duty sales. Some are due to the big discrepancy between Europe and US is due to the high gas prices that have been in Europe for a long time and we’re now seeing here. Does what we’re seeing in gas prices in the US make you more optimistic about the opportunity for light duty in the US?

James B. Flaws

Yes, though it’s a complicated question. I mean you have both the infrastructure to distribute the diesel, you have the different tax policies play out in Europe to get the higher fuel economy tilted of the balance to be a little more in favor of diesel, and then you actually have sort of reputation of the technology. In the US, we had a bad diesel experience way back when they first introduced it here, not at all similar what they have in Europe where really the true high-performance cars are all diesel. So, yeah, we’re optimistic longer term that diesel is going to play an increasing role in the engine plants here in the US, but it’s going to take time Jeff.

Jeff Evanson – Sanford Bernstein

And last question is, you mentioned that you’re now seeing some evidence that 2009 LCD glass demand may be higher than you expected a few months ago and therefore you’re accelerating CapEx into 2008, so you’ll be ready in early 2009. What are some of the factors that go into that?

James B. Flaws

Primarily driven by television. We’re seeing television being ahead of what our expectations were and that’s the primary thing. We haven’t yet determined some of the long-term factors that Pete Volanakis went through very eloquently at the demise of CRTs, the rise of emerging markets televisions for home, etc. We’re starting to get a sense that some of that may be coming true. It’s just a little hard to pick up on a quarter by quarter basis, but clearly the demise of CRTs is happening very rapidly.

Jeff Evanson – Sanford Bernstein

Great, and one quick question on it though is to the extent there is a demise in CRTs, if we guess that, the diagonal size of the CRTs are roughly related to what they might buy in LCDs. That would suggest that there is potentially a new demand peak coming in the small sizes. Do you that would be satisfied with Gen 6 and Gen 7 capacity or that people will use higher generations and just make more cuts?

James B. Flaws

We agree that they are going to be make below 32’s, I think you’ll be right there. We obviously saw even in the fourth quarter more small size televisions being sold than what we originally forecasted. I think the real question is because of the 4 x 3 to 16 x 9 change with the height thing, people do actually move up. If you previously had a 27, you’ll put a 32 in based on just the height, but we definitely saw more 26-inch LCDs sold in quarter 4.

Wendell P. Weeks

One of the things that has been an interesting trend to build on Jim’s point is we’re seeing the use of even larger Gen sizes for smaller TV sizes than we would have thought once upon a time, and they’re driving very nice glass utilization here and very nice efficiency and good cost performance, so they’re getting more and more flexible on how they use it, and I think it’s overall very positive trend for us pushing the industry in the direction of our strength, which is very large size, very high performance glasses.

Jeff Evanson – Sanford Bernstein

Great, thanks guys.

Operator

John Harmon of Needham & Company, your line is open.

John Harmon - Needham & Company

Hi, good morning.

James B. Flaws

Good morning.

John Harmon, Needham & Company

Just a couple of questions please – this reflects on an earlier question. Given that you’ve been sold out – you were sold out in Q1 and sold out a t present and not able to build inventory, is it that fact that would cause you to add capacity in order to increase your plan or is it driven by your end-market analysis that causes you to bring some of the ’09 capacity into ’08?

Wendell P. Weeks

For us, it’s always our view of the end market, John.

John Harmon - Needham & Company

Right.

Wendell P. Weeks

We try and not to let the short-term supply chain of what our customers do directly to impact what we choose to do with capacity. We base it on our version of what we believe the end market to be.

John Harmon - Needham & Company

Okay, thank you, and what percentage of your fiber volume was classified as premium, and if certain access programs really do take off and you get the customers you think you’ll get, could this number really exceed the 5% to 10% range again?

James B. Flaws

We don’t have any forecast that says that premium fiber moves out of that kind of range at this point in time. Clearly submarine has been more robust over the last 18 months than it was before, but unfortunately it remains a very tiny amount of glass in the undersea cables. We would love to see more multimode in the future and have hopes on that, but we’re not looking for a sudden up tick in the amount of premium fiber.

John Harmon - Needham & Company

Okay my thinking in the question was if Clear Curve is counted as premium fiber? Whether you are we expecting…

Wendell P. Weeks

Clear Curve is one of course that we have high hopes for, and it’s just early, okay – it’s just early, it’s going to take a while for this business, for this product line to begin the matter to our overall financials. It’s a radically different product and it’s going into a new application, so that tends to mean for a relatively slow adopt rate, and then hopefully build into a very strong business for us. This can take a little bit of time.

John Harmon, Needham & Company

Got it, thank you.

Operator

Ajit Pai of Thomas Weisel Partners, your line is open.

Ajit Pai - Thomas Weisel Partners

Good morning.

James B. Flaws

Good morning.

Wendell P. Weeks

Good morning.

Ajit Pai - Thomas Weisel Partners

Two quick questions; the first one is about the free cash flows – I think you’ve talked about despite the higher CapEx your projecting that you still expect free cash flows in excess of half a billion dollars. Could you give us some color as to which area you actually expect the extra cash to come from, which businesses?

James B. Flaws

Primarily display.

Ajit Pai - Thomas Weisel Partners

So it would be primarily display. And then the second question would be about when you’re looking at your telecom business right now both in the fiber and then also on the hardware and equipment side, could you give us some color as to what the pricing pressure and competitor dynamics are especially on the hardware and equipment side?

Wendell P. Weeks

Always the telecom has a challenging pricing environment primarily because you have very few, very large powerful customers, so buyer power is quite high. What we have seen though is that some of our new products set whether it be our flex net product sets, our series of fiber-to-the-prem products, now with Clear Curve, and a number of our new introductions that significantly improve productivity for our customers that that has been able to help moderate that to some extent. Add to that the fact that fiber capacity at least that’s in operation at this time is relatively tight. There’s other capacity that can be brought on and it means that helps offset some of that typical aggression from the buyer’s side. So, I would say the situation is relatively consistent with where it was last year, and we have hopes for it to moderate over time.

Ajit Pai - Thomas Weisel Partners

And the mix in that business, on the Telecom side between fiber and cable and hardware and equipment, would you expect the fiber and cable business from this point onwards to be growing much faster than the hardware and equipment side?

Wendell P. Weeks

No, I wouldn’t say so because if we continue to be successful with fiber-to-the-premise, that’s going to have a more significant part of the revenue would be hardware and equipment, and it would be fiber and cable.

Ajit Pai - Thomas Weisel Partners

Got it, so then the margin assumptions we’d be looking at for that business in a go-forward basis is that we broadly would be expecting all the incremental gross margins do to sort of get reflected in about the same expansion in operating margins. Is that a fair assumption?

Wendell P. Weeks

What we should probably do and I haven’t seen update recently what our mix of split is for fiber-to-the premise between hardware and equipment, cable, and fiber will do. We’ll update that here and make that public information so that you guys can have a better idea of your modeling purposes.

Ajit Pai - Thomas Weisel Partners

Got it, thank you.

Operator

Carter Shoop from Deutsche Bank, your line is open.

Carter Shoop - Deutsche Bank

Good morning, I wanted to ask a couple of quick questions on the LCD supply chain – if you look at your customer’s balance sheets and inventory levels there, they’re clearly very low relative to the historical levels in the first quarter. I was hoping that you guys could provide a little bit extra color in regards to how you see glass inventory at your customer’s. Do you have any color there that you can divide in regards to how that’s trending relative to historical perspectives?

James B. Flaws

Yeah, I would say that inventories at our customer’s compared to and history a long time, but certainly at this point in time of the year compared to ‘07 and ‘06, it’s substantially lower, and that’s been reflected. In quarter 1, we actually air-shipped a little, but we were really desperate to get it, so we don’t see any glass building up at panel makers. I think the cumulative including all the inventories added about a week from the beginning of the year to the end of the first quarter and they still remain well below where they were a year ago.

Carter Shoop - Deutsche Bank

Do you have a sense on how much it was increased in ‘07 or ‘06 from the beginning of the quarter to the end of the quarter?

James B. Flaws

In ‘07, it was a similar amount, but they came in higher. In ’06, it was 2 weeks.

Carter Shoop - Deutsche Bank

Great, thanks. In regards to SEC, you mentioned that a lower tax rate helped there. Can you quantify what that change was?

James B. Flaws

I think they were about 10% in Q1, but we were expecting it to be between 14% and 15% for the full year; it really was an adjustment of some accruals that we have made last year where we hadn’t finalized our numbers. So for the full year, it should be between 14% and 15%.

Carter Shoop - Deutsche Bank

Great. And with the FX hedges, it sounds like that was about a penny head-wind there. Was that more of the volatility of the Yen or was that more the decline and then what does that mean on a go-forward basis, are we going to continue to see losses there if the Yen continues to decline?

James B. Flaws

No you should not see those same losses in the other income/other expense. It was extraordinary volatility in 1 month and also we have hedged against the balance sheet and we had big changes in the balance sheet within the quarter and so you should not see those repeat every quarter going forward.

Carter Shoop - Deutsche Bank

Great, the last question, the specialty materials division is a new division this quarter, any way to give us a little bit of color in regards to expectations there for the full year in regards to both revenue growth and margins?

Wendell P. Weeks

We’re not going to give you a view on the full year, what I will say is on quarter 2 we do expect that segment sales to be up about 20% sequentially which should be driven by our increased demand for the advanced optical glasses as well as our new Gorilla glass which is doing very well.

Carter Shoop - Deutsche Bank

Is there any seasonality in that business?

Wendell P. Weeks

We’re actually adding some capacity related to Gorilla, so we’re very happy with its progress

James B. Flaws

But we do expect year over year growth for this segment in total. The quarters in this segment are much more volatile than some of our other businesses, but we are looking for year over year growth driven by Gorilla glass.

Carter Shoop - Deutsche Bank

Great, thank you.

Wendell P. Weeks

Jan, we’re going to squeeze in one more call.

Operator

John Roberts of Birmingham Research, your line is open.

Wendell P. Weeks

John, are you there?

(Pause)

Wendell P. Weeks

I’ll tell you what, we’re running late anyway, and we’ll pass over to Jim for some final comments.

James B. Flaws

I have a few IR related announcements and also a couple of closing comments. Ken and I will be in Dallas on May 1st to meet with investors and answer their questions at an open investor luncheon. If you are interested in attending, please call Ken. Peter F. Volanakis, our President and Chief Operating Officer, will be presenting at the J.P. Morgan Conference in Boston on May 19th, Wendell will be presenting at the Burstein Strategic Growth Conference on May 29th, and on June 16th and 17th, Ken and I will be hosting open investor luncheons in Denver and Minneapolis, and again, if you’re interested, please call Ken.

We hope investors were pleased with our start in 2008. Our first quarter results were strong. Our second quarter expectations have exceeded the estimates on Wall Street. Based on our second quarter guidance, our first half sales would be over 20% growth over the first half of last year and EPS to be up over 50% last year without special items. Most of this growth is driven by our display business--a business we strongly feel will continue to grow well into the next decade. We know there continues to be short-term concerns about LCD television demand in this economy. As I said earlier, we’ve been living in this economic slowdown for more than 6 months and have not seen any impact to LCD television sales. Longer-term, there are some investors who believe this business only has a year or two of growth remaining. This is obviously not our view. Some view display as a young business, but one that will be old with no growth by 2010. We question this thinking. LCD televisions today represent only 8% of the 1.9 billion televisions in homes worldwide. We believe this percent will continue to rise substantially over the next number of years. Number of televisions per household especially in developing countries is also low. Due to the very slim form, LCD television is being placed in rooms where they had not been traditionally, like kitchens, bathrooms, and guest bedrooms. This is increasing the number of televisions per home around the world. In China, a country with 400 million homes, there are only 1.1 TVs on average per home. We believe there will be substantial growth in China and other developing countries. One more interesting fact - China has larger average televisions than any place else in the world. In summary, we believe the number of TVs per home will increase around the world, and most will be LCD televisions, especially as the CRT market continues to collapse. Last year about 40% of the world CRT glass making capacity was taken out by CRT makers; this trend will continue. In the US, it has become increasing difficult to even find a CRT. If you haven’t tried, next time you’re in an electronic store, discount wholesaler, try to find one; this isn’t easy. We believe this same trend is taking place around the world. LCD is clearly the technology of choice to replace the CRTs, and we think this will fuel more glass demand. So for investors who spend the time to look at the market trends and do the math calculating the glass opportunity, they will understand the potential size of glass market is substantial but also these trends will take years to play up. We outlined this information at our investor day in February and urge investors to revisit that presentation. In closing, we remain optimistic about our prospects both short-term and long-term and hope investors will share that optimism.

Kenneth C. Sofio

Thank you, Jim and thank you Wendell. Thank you all for joining us this morning. A playback of this call will be available beginning at 10:30 a.m. Eastern Time today until 5 p.m. Eastern time on Tuesday, May 13th. To listen, dial 203-369-3844, no password is required. The audio cast is also available on our website during that time. Jan, that concludes our call today. Please disconnect all lines.

Operator

Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Corning Incorporated Q1 2008 Earnings Call Transcript
This Transcript
All Transcripts