Revenue Capacity & Investments
Q: Where are the biggest opportunities for growth given $3B extra capacity?
A: Corning has capacity to support well over $3 billion in additional sales without significant capital investment. " Future growth opportunities depend on where sales come from, but they feel confident they can support growth above $3 billion with existing capacity. "

Yen Hedging & Display Profits
Q: How will yen hedging affect display business profitability?
A: Corning is committed to maintaining appropriate returns in the display business, using a combination of yen hedging and price increases to offset currency impacts. " " " They have made progress on hedging and will opportunistically build their 2025 hedge portfolio. " " It's too early to discuss core rates for 2025, but they aim to deliver similar economics regardless of yen fluctuations. " " "

Gross Margins & Operating Leverage
Q: How should we think about gross margin cadence going forward?
A: Gross margins have expanded by 300 basis points despite sales declining by almost $400 million, due to improved productivity and price increases. " With a current baseline of 37%, Corning expects gross margins to increase as sales recover, leveraging existing capacity and keeping operating expenses relatively flat. " "

Data Center AI Opportunities
Q: When will AI-related data center revenues impact financials?
A: Corning expects to see momentum in revenue growth from AI data centers starting in the back half of this year, assuming current orders ship as planned. " The shift to GPU racks increases fiber demand per rack by 8 times, driving demand for Corning's innovative solutions. "

Optical Comms & 5G Impact
Q: How does 5G's performance affect Corning's telco business?
A: The transition to 5G requires more infrastructure, combining wireline and wireless networks, which offers cost savings and new revenue opportunities for telcos. " However, given muted deployment outlooks and inventory normalization, Corning anticipates a relatively modest increase in fiber deployments this year. "

Display Cycle & Outlook
Q: Is the display market cycle changing in duration or volatility?
A: Shifts in panel manufacturing to China are altering industry dynamics. " Panel makers now reduce utilization to match set makers' orders, potentially smoothing out traditional inventory-driven cycles. " It's early to tell if this change is long-term, but it could lead to a healthier industry with less volatility. "

Inventory Levels & OpEx
Q: Why were inventory and OpEx higher this quarter?
A: Inventory rose due to low sales volumes, but Corning expects to reduce inventory and improve cash flow as volumes increase. " Operating expenses were higher because variable compensation returned to normal levels after being lower in 2023 due to not meeting targets. " They aim to keep OpEx relatively flat, creating leverage as sales grow. "

Specialty Materials Outlook
Q: What's driving Specialty Materials' performance and outlook?
A: Specialty Materials performed as expected, and growth will come from adding more Corning content. " Smartphone units are expected to be up only 1–2% this year, so significant growth depends on Corning's innovation and content additions, which are anticipated for future model years. "

BEAD Timing & Optical Business
Q: What's the outlook on BEAD funding's impact on optical business?
A: Corning expects BEAD funding allocation this year but anticipates spending to start next year due to governmental processes. " They remain conservative but supportive, acknowledging the requirement for U.S. content and the potential positive impact on their optical business. "

China Subsidies & TV Demand
Q: Could China’s appliance subsidies boost TV demand and glass volume?
A: It’s too early to predict the impact of China’s new subsidy programs on TV demand. " Corning is still analyzing how these subsidies will affect consumers but had previously expected muted retail demand in China this year. "

Data Center Locations & Energy
Q: Is there an opportunity with data centers seeking new energy sources?
A: Yes, Corning sees an interesting opportunity as data centers seek locations with spare energy capacity. " Their global footprint allows them to respond to these developments, potentially leading to innovation and volume growth. " However, it's too early to factor this into projections as infrastructure and energy sourcing are still being resolved. "

Hedging Program Cost
Q: Is the hedging program cost minimal to shareholders?
A: Yes, the cost of hedging is minimal, and Corning includes any hedging costs in their profitability calculations. " They are long yen and have generated approximately $2.5 billion in cash from hedging over time. " They aim to manage currency volatility through hedging and price adjustments. "

Margin Targets
Q: Can Corning reach 40% gross margins with the $3B sales growth?
A: Despite absorbing significant inflation and raising prices, which reduced margin percentages, Corning believes they can reach a 40% gross margin as sales increase. " Adjusted for these factors, 38% is considered the new 40% in old terms, and they are confident in achieving this target. "