Corning Incorporated — Third Quarter 2026 Earnings Summary

Financial Performance:

• Core sales grew 19% year over year to $5.08 billion in Q3 2026, the strongest growth since the launch of the Springboard plan.
• Core EPS increased 36% year over year to $0.91.
• GAAP sales were $4.86 billion, up 18% year over year.
• GAAP EPS was $0.78, up 56% year over year.
• Core gross margin expanded 150 basis points year over year to 40.5%.
• Core operating margin expanded 310 basis points year over year to 22.7%.
• Core return on invested capital (ROIC) increased 330 basis points year over year to 16.7%.
• Adjusted free cash flow for the quarter was $661 million; operating cash flow was $1.06 billion.
• Adjusted free cash flow for the first nine months of 2026 was $2.27 billion.
• Capital expenditures for the quarter were over $500 million.
• Total assets were $34.126 billion as of September 30, 2026, compared to $30.976 billion as of December 31, 2025.
• Total long-term debt was $7.267 billion as of September 30, 2026, compared to $7.630 billion as of December 31, 2025.

Guidance and Future Outlook:

• Management expects Q4 2026 core sales to grow approximately 19% year over year to a range of $5.2 billion to $5.3 billion.
• Management expects Q4 2026 core EPS to grow approximately 36% year over year to a range of $0.96 to $1.00.
• The acceleration of growth outlined in the "20-30-40" Springboard Plan has begun, with a goal to double the annualized sales run rate from $20 billion to $40 billion by the end of 2030.
• Management expects to grow earnings faster than sales in the future, with significantly higher ROIC and substantially more free cash flow.

Business Segments and Product Lines:

• Optical Communications sales grew 44% year over year to $2.38 billion; Gen AI product sales grew more than 100% year over year.
• Enterprise Networks sales grew 84% year over year.
• Solar sales grew 37% year over year to $436 million; production is ramping, albeit at a slower pace than anticipated, with profitability expected to improve as productivity increases.
• Glass Innovations sales were $1.506 billion, down 3% year over year, while outperforming TV unit, notebook, and smartphone markets impacted by memory pricing.
• Automotive sales were $470 million, up 4% year over year.
• Life Sciences and Emerging Growth Businesses sales were $290 million, up 1% year over year.
• Corning secured four long-term, multibillion-dollar customer agreements in Q3, including with Verizon and AT&T.
• Effective Q1 2026, Corning revised its segment reporting structure, creating a Glass Innovations segment (combining Display and Specialty Materials) and a Solar segment (including Hemlock Semiconductor Group and solar wafer/module manufacturing).

Market and Competitive Landscape:

• U.S. trade action under Section 232 of the Trade Expansion Act of 1962 improved the overall pricing environment and demand for U.S.-made solar products in Q3.
• Optical Communications innovations are seeing faster adoption, outpacing GPU unit growth.
• Glass Innovations is successfully executing a "More Corning" content strategy to drive adoption of innovations.

Risks and Challenges:

• Solar business development faces challenges regarding manufacturing facility construction, ramp, and operations, including the achievement of revenue and profitability targets.
• Potential risks include global economic trends, geopolitical risks, trade tensions, sanctions, tariffs, and supply chain disruptions.
• Volatility in macroeconomic conditions, commodity prices, and exchange rates (particularly USD vs. JPY, MXN, CNY, KRW, EUR, and TWD) could impact results.
• Risks include loss of intellectual property, inability to enforce patents, disruption to facilities or IT systems, and adverse litigation.
• Future dividend payments and share repurchases are subject to cash flow and earnings conditions.

Management Commentary and Tone:

• CEO Wendell P. Weeks described the quarter as "outstanding," citing strong proof points of the Springboard Plan's acceleration.
• CFO Ed Schlesinger noted that long-term customer agreements share the cost and risk of expansions, supporting steady capacity additions.
• Management expressed confidence that outstanding performance will continue into the fourth quarter.

Other Key Points:

• Corning will attend the UBS Global Technology and AI Conference on December 1 in Scottsdale, Arizona.
• The company hosts a third-quarter conference call on October 27 at 8:30 a.m. ET.
• Management uses non-GAAP core performance measures to evaluate operating performance, excluding items such as hedged exposures, acquisition costs, and restructuring charges.
• Effective April 1, 2026, Corning replaced its constant-currency adjustment with an "adjustment for hedged exposures" methodology for foreign currency reporting.