Corning Inc.

05/01/2026 | Press release | Distributed by Public on 05/01/2026 08:44

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Corning Incorporated and its consolidated subsidiaries are hereinafter sometimes referred to as the "Company," the "Registrant," "Corning," "we," "our," or "us."
This report contains forward-looking statements that involve a number of risks and uncertainties. These statements relate to plans, objectives, expectations and estimates and may contain words such as "will," "believe," "anticipate," "expect," "intend," "plan," "seek," "see," "would," "target," "estimate," "forecast," or similar expressions. Actual results could differ materially from what is expressed or forecasted in forward-looking statements. Some of the factors that could contribute to these differences include those discussed under "Forward-Looking Statements," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report.
ORGANIZATION OF INFORMATION
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") was prepared to provide a historical and prospective narrative on our financial condition and results of operations through the eyes of management and should be read in conjunction with our consolidated financial statements and the accompanying notes to those financial statements and our MD&A of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K").
Our MD&A is organized as follows:
•Overview
•Results of Operations
•Segment Analysis
•Core Performance Measures
•Liquidity and Capital Resources
•Environment
•Critical Accounting Estimates
•Forward-Looking Statements
OVERVIEW
Corning is one of the world's leading innovators in materials science, with a 175-year track record of life-changing inventions. Corning applies its unparalleled expertise in glass science, ceramic science, and optical physics, along with its deep manufacturing and engineering capabilities to develop category-defining products that transform industries and enhance people's lives. Corning succeeds through sustained investment in RD&E, a unique combination of material and process innovation, and deep, trust-based relationships with customers who are global leaders in their industries. Corning's capabilities are versatile and synergistic, which allows the company to evolve to meet changing market needs, while also helping its customers capture new opportunities in dynamic industries. Today, Corning's markets include optical communications, mobile consumer electronics, display, automotive, solar, semiconductors, and life sciences.
Corning's industry-leading products include damage-resistant cover materials for mobile devices and precision glass for advanced displays; optical fiber, cable and connectivity solutions for advanced communications networks, such as fiber to the home and data centers, enabling artificial intelligence and connections around the world; trusted products to accelerate drug discovery and delivery; clean-air technologies and technical glass for cars and trucks; and polysilicon materials and products for semiconductor and solar applications.
In the third quarter of 2023, we introduced our Springboard plan to grow sales and enhance our profitability base. We communicated a high-confidence plan to add $3 billion in incremental annualized core sales and set a core operating margin target of 20% by the end of 2026 (as compared to our Springboard starting point). As of the fourth quarter of 2025, we achieved both our growth and profitability targets a full year ahead of plan, and in January 2026, we upgraded this high-confidence plan to $5.75 billion. Since the launch of Springboard, we have significantly grown annualized sales and expanded our profitability. Our continued performance on our Springboard plan has transformed the financial profile of the Company and delivered durable growth across our businesses.
Overall, we believe we have established a firm foundation from which to launch future profitable growth. We see remarkable demand for our innovations and manufacturing capabilities, which we believe will lead to additional growth opportunities through 2026 and beyond. We therefore expect to increase both our capacity and technology capabilities as required to achieve our goals, while sharing risk appropriately to achieve the returns that underpin our Springboard plan.
2026 Corporate Outlook
We expect core net sales of approximately $4.6 billion for the second quarter of 2026.
RESULTS OF OPERATIONS
The following table presents selected highlights from our operations (in millions):
Three months ended
March 31, 		%
change
2026 2025 2026 vs. 2025
Net sales $ 4,144 $ 3,452 20 %
Cost of sales $ 2,616 $ 2,238 17 %
Gross margin $ 1,528 $ 1,214 26 %
Gross margin % 37 % 35 %
Selling, general and administrative expenses $ 588 $ 471 25 %
as a % of net sales 14 % 14 %
Research, development and engineering expenses $ 278 $ 270 3 %
as a % of net sales 7 % 8 %
Translated earnings contract loss, net
$ 16 $ 101 (84 %)
Income before income taxes $ 529 $ 240 120 %
Provision for income taxes $ 121 $ 55 120 %
Effective tax rate 22.9 % 22.9 %
Net sales
For the three months ended March 31, 2026, net sales increased $692 million, or 20%, when compared to the same period in 2025. This was primarily driven by an increase in sales for optical communication products of $491 million and an increase in sales for polycrystalline silicon and solar products of $164 million.
Cost of sales / Gross margin
The types of expenses included in cost of sales are: raw materials consumption, including direct and indirect materials; salaries, wages and benefits; depreciation and amortization; production utilities; production-related purchasing; warehousing (including receiving and inspection); repairs and maintenance; inter-location inventory transfer costs; production and warehousing facility property insurance; rent for production facilities; freight and logistics costs; and other production overhead.
For the three months ended March 31, 2026, cost of sales increased $378 million, or 17%, when compared to the same period in 2025, primarily driven by the increase in net sales as discussed above. Gross margin increased $314 million, or 26%, and increased as a percentage of sales by 2 percentage points when compared to the same period in 2025 as higher profit in Optical Communications was partially offset by temporarily higher costs to ramp up capacity to produce more in Solar.
Selling, general and administrative expenses
The types of expenses included in selling, general and administrative expenses are: salaries, wages and benefits, including variable compensation and share-based compensation expense; travel; sales commissions; professional fees; and depreciation and amortization, utilities and rent for administrative facilities.
For the three months ended March 31, 2026, selling, general and administrative expenses increased $117 million when compared to the same period in 2025, primarily due to an increase in variable compensation.
Research, development and engineering expenses
For the three months ended March 31, 2026, research, development and engineering expenses increased $8 million and remained consistent as a percentage of sales when compared to the same period in 2025.
Translated earnings contract loss, net
Included in translated earnings contract loss, net, is the impact of foreign currency contracts which economically hedge the translation exposure arising from movements in the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro and its impact on net income.
The following table provides detailed information on the impact of translated earnings contract loss, net (in millions):
Three months ended
March 31, 2026 		Three months ended
March 31, 2025
Change
2026 vs. 2025
Income
before
tax 		Net
income
Income
before
tax
Net
income
Income
before
tax 		Net
income
Hedges related to translated earnings:
Realized gain, net (1) (2)
$ 49 $ 38 $ 16 $ 12 $ 33 $ 26
Unrealized loss, net
(65) (50) (117) (89) 52 39
Total translated earnings contract loss, net
$ (16) $ (12) $ (101) $ (77) $ 85 $ 65
(1)For the three months ended March 31, 2026, and 2025, amount includes non-cash pre-tax realized losses of $90 million and $40 million, respectively, related to the premiums of expired option contracts.
(2)For the three months ended March 31, 2026, amount excludes $11 million gain related to forward contracts designated as net investment hedge, which was recorded in accumulated other comprehensive loss on the consolidated balance sheets and reflected within investing activities on the consolidated statements of cash flows.
The impact to income from realized activity for the three months ended March 31, 2026 was primarily driven by realized gains from our Japanese yen-denominated hedges, partially offset by realized losses from our South Korean won-denominated hedges. The impact to income from realized activity for the three months ended March 31, 2025 was primarily driven by realized gains from our Japanese-yen and Mexican peso denominated hedges, partially offset by realized losses from our South Korean won denominated hedges.
The impact to income from unrealized activity for the three months ended March 31, 2026 was primarily driven by unrealized losses from our Japanese yen, new Taiwan dollar, South Korean won and Mexican peso-denominated hedges, partially offset by unrealized gains from our euro and Chinese yuan-denominated hedges. The impact to income from unrealized activity for the three months ended March 31, 2025 was primarily driven by unrealized losses from our Japanese-yen and euro denominated hedges, partially offset by unrealized gains from our South Korean won-denominated hedges.
Income before income taxes
For the three months ended March 31, 2026, income before income taxes increased $289 million when compared to the same period in 2025, primarily driven by an increase in gross margin, as discussed above, partially offset by an increase in selling, general and administration expenses due to an increase in variable compensation.
Provision for Income Taxes
For the three months ended March 31, 2026, the effective tax rate differed from the United States ("U.S.") statutory rate of 21%, primarily due to the impact of an unfavorable tax ruling in South Korea partially offset by changes in reserves, adjustments to share-based compensation, government incentives and foreign-derived deduction eligible income.
For the three months ended March 31, 2025, the effective tax rate differed from the U.S. statutory rate of 21%, primarily due to certain pre-tax losses with no corresponding expected tax benefit, partially offset by foreign-derived intangible income and non-taxable items.
For the three months ended March 31, 2026, the effective tax rate differed when compared to the same period in 2025 primarily due to changes in reserves, adjustments to share-based compensation, government incentives, and foreign-derived deduction eligible income (previously foreign-derived intangible income) partially offset by the impact of an unfavorable tax ruling in South Korea and pre-tax losses with no corresponding expected tax benefit.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA includes various tax law changes, including the permanent extension of certain provisions originally enacted under the Tax Cuts and Jobs Act, modifications to the international tax framework and the reinstatement of favorable treatment for certain business tax provisions. These include 100% bonus depreciation, immediate expensing of domestic research and development costs and revised limitations on the deductibility of business interest expense. The provisions of the OBBBA are subject to multiple effective dates, with some effective beginning in 2025 and others phased in through 2027. The Company does not expect the OBBBA to have a material impact on our estimated annual effective tax rate in 2026.
The Internal Revenue Service ("IRS") is currently conducting examinations of the Company's U.S. federal income tax returns for the years 2015 through 2018 and 2019 through 2020, including issues related to the one-time transition tax enacted under the Tax Cuts and Jobs Act of 2017. If challenged, Corning believes that it is at least more likely than not to sustain its position relating to these matters. However, if the Company is ultimately unsuccessful in defending its position, the impact could be material to its consolidated financial statements.
SEGMENT ANALYSIS
Financial results for the reportable segments and Life Sciences and Emerging Growth Businesses are prepared on a basis consistent with the internal disaggregation of financial information to assist the chief operating decision maker in making internal operating decisions, which is more fully discussed within Note 14 (Reportable Segments) in the accompanying notes to the consolidated financial statements and includes a reconciliation of segment information to the corresponding amounts in the consolidated statements of income.
Effective in the first quarter of fiscal 2026, the Company revised its segment structure. This revision corresponds with changes in how our businesses are managed, which align with how our chief operating decision maker ("CODM") reviews performance and allocates resources. As a result, the Company began managing its Display and Specialty Materials businesses as a single operating segment, referred to as Glass Innovations, and its Hemlock Semiconductor Group, solar wafer, and solar module businesses as a single operating segment, referred to as Solar. In addition, the Company's Life Sciences business does not meet the quantitative threshold for separate reporting and therefore is no longer reported as a reportable segment and is included together with all other businesses that do not meet the quantitative threshold for separate reporting within Life Sciences and Emerging Growth Businesses. Optical Communications and Automotive remain unchanged and continue to be reported as separate reportable segments.
As a result of the above changes, the Company has determined it has four reportable segments for financial reporting purposes, organized primarily based on product offerings, as follows:
•Optical Communications - manufactures carrier network and enterprise network components for the telecommunications industry; the carrier network group consists primarily of products and solutions for optical-based communications infrastructure for services such as video, data and voice communications; the enterprise network group consists primarily of optical-based communication networks, including hyperscale data centers, sold to businesses, governments and individuals for their own use.
•Glass Innovations - utilizes proprietary melting, precision forming, strengthening, and finishing processes to create advanced flat glass substrates for LCD and OLED displays and cover materials for mobile consumer electronics; and provides material formulations and optical fabrication for specialty glass, glass ceramic, fluoride crystal, and other precision materials and components for semiconductor, aerospace and defense, telecommunications, commercial, and industrial applications.
•Automotive - manufactures ceramic substrates and filter products for emissions control systems in mobile applications; as well as technical glass and optic products and solutions for the interior and exterior of vehicles.
•Solar - manufactures silicon materials and products for semiconductor and solar applications, including hyper-pure polysilicon produced by Hemlock Semiconductor Group, solar wafers, and solar modules. The segment's products serve customers across the semiconductor and solar markets globally from a manufacturing footprint in the United States.
All other businesses that do not meet the quantitative threshold for separate reporting have been grouped as Life Sciences and Emerging Growth Businesses.
These changes reflect the Company's internal management structure and align with the information regularly reviewed by the CODM.
Segment net income may not be consistent with measures used by other companies.
The comparative period segment information presented below has been recast for the changes in segment reporting as described above.
The following table presents segment net sales by reportable segment and Life Sciences and Emerging Growth Businesses (in millions):
Three months ended
March 31, 		$
change 		%
change
2026 2025 2026 vs. 2025 2026 vs. 2025
Optical Communications $ 1,846 $ 1,355 $ 491 36 %
Glass Innovations
1,420 1,406 14 1 %
Automotive 437 440 (3) (1 %)
Solar
370 206 164 80 %
Net sales of reportable segments 4,073 3,407 666 20 %
Life Sciences and Emerging Growth Businesses
272 272 - - %
Net sales of reportable segments and
Life Sciences and Emerging Growth Businesses (1)
$ 4,345 $ 3,679 $ 666 18 %
(1)Refer to Note 14 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net sales.
Optical Communications
The increase in segment net sales was primarily due to continued growth in our Enterprise business driven by strong demand for our Generative AI products, and in our Carrier business, driven by demand for datacenter interconnect products and fiber-to-the-home products.
Glass Innovations
The increase in segment net sales was primarily due to continued strong demand for LCD glass and Gorilla glass.
Automotive
Segment net sales remained consistent as increased premium content sales offset softness in the North America heavy-duty diesel market.
Solar
The increase in segment net sales was primarily driven by growth in polysilicon and solar wafers and module sales for the solar industry.
Life Sciences and Emerging Growth Businesses
Segment net sales remained consistent with the comparative periods.
The following table presents segment net income by reportable segment and Life Sciences and Emerging Growth Businesses (in millions):
Three months ended
March 31, 		$
change 		%
change
2026 2025 2026 vs. 2025 2026 vs. 2025
Optical Communications $ 387 $ 201 $ 186 93 %
Glass Innovations
324 317 7 2 %
Automotive 70 68 2 3 %
Solar
7 27 (20) (74 %)
Net income of reportable segments 788 613 175 29 %
Life Sciences and Emerging Growth Businesses
(24) (30) 6 20 %
Net income of reportable segments and
Life Sciences and Emerging Growth Businesses (1)
$ 764 $ 583 $ 181 31 %
(1)Refer to Note 14 (Reportable Segments) in the accompanying notes to the consolidated financial statements for the reconciliation to consolidated net income.
Optical Communications
The increase in segment net income was primarily driven by strong incremental profit on higher revenue, as outlined above.
Glass Innovations
The increase in segment net income was primarily driven by increased sales, as outlined above, and strong incremental profit on higher volumes.
Automotive
The increase in segment net income was primarily driven by improved performance within our automotive glass business, partially offset by decreased sales in our environmental technologies business, as outlined above.
Solar
The decrease in segment net income was primarily driven by temporarily higher costs to ramp up capacity.
Life Sciences and Emerging Growth Businesses
Segment net income remained fairly consistent with the comparative period.
CORE PERFORMANCE MEASURES
In managing the Company and assessing our financial performance, we adjust certain measures included in our consolidated financial statements to exclude specific items to arrive at measures that are not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP") and exclude specific items that are non-recurring, related to foreign exchange volatility, or unrelated to continuing operations. These measures are our core performance measures.
Management uses core performance measures, along with GAAP financial measures, to make financial and operational decisions and certain of these measures also form the basis of our compensation program metrics. Management believes that our core performance measures are indicative of our core operating performance and provide investors with greater visibility into how management evaluates our results and trends and makes business decisions. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures.
Items that are excluded from certain core performance calculations include: the impact of translating foreign denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment and other charges and credits, certain litigation, regulatory and other legal matters, pension mark-to-market adjustments and other items which do not reflect the ongoing operating results of the Company.
In addition, because a significant portion of our revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. Therefore, management utilizes constant-currency reporting for the Optical Communications, Glass Innovations and Automotive segments to exclude the impact from the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro, as applicable to the segment. The most significant constant-currency adjustment relates to the Japanese yen exposure within the Glass Innovations segment. The constant-currency rates established for our core performance measures are long-term management-determined rates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward, cross-currency swaps or option contracts and foreign-denominated debt. For details of the rates used, refer to the footnotes to the "Reconciliation of Non-GAAP Measures" section. We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuations, analyze underlying trends in the businesses and establish operational goals and forecasts.
For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, refer to "Reconciliation of Non-GAAP Measures." With respect to the outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because management does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of management's control. As a result, management is unable to provide outlook information on a GAAP basis.
Results of Operations - Core Performance Measures
The following table presents selected highlights from our operations, excluding certain items (in millions, except per share amounts):
Three months ended
March 31, 		%
change
2026 2025 2026 vs. 2025
Core net sales $ 4,345 $ 3,679 18 %
Core net income $ 612 $ 467 31 %
Core earnings per share $ 0.70 $ 0.54 30 %
Core Net Sales
For the three months ended March 31, 2026, we generated core net sales of $4.3 billion compared to $3.7 billion for the same period in 2025. The increase in core net sales of $666 million was primarily driven by increased segment sales of $491 million in Optical Communications and $164 million in Solar. Net sales of reportable segments and Life Sciences and Emerging Growth Businesses is discussed in detail in the "Segment Analysis" section of our MD&A.
Core Net Income
For the three months ended March 31, 2026, we generated core net income of $612 million compared to $467 million for the same period in 2025. The increase of $145 million was primarily due to higher segment net income of $186 million in Optical Communications, partially offset by decreased segment net income of $20 million in Solar. Net income of reportable segments and Life Sciences and Emerging Growth Businesses is discussed in detail in the "Segment Analysis" section of our MD&A.
Core Earnings per Share
Core earnings per share increased for the three months ended March 31, 2026 to $0.70 per share, primarily as a result of the changes in core net income, outlined above.
The following table sets forth the computation of core earnings per share (in millions, except per share amounts):
Three months ended
March 31,
2026 2025
Core net income $ 612 $ 467
Weighted-average common shares outstanding - basic 857 855
Effect of dilutive securities:
Stock options and other awards 14 11
Weighted-average common shares outstanding - diluted 871 866
Core earnings per share $ 0.70 $ 0.54
Reconciliation of Non-GAAP Measures
We utilize certain financial measures and key performance indicators that are not calculated in accordance with GAAP to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company's financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows, or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure as calculated and presented in accordance with GAAP in the consolidated statements of income or statements of cash flows.
Core net sales, core net income and core earnings per share are non-GAAP financial measures utilized by our management to analyze financial performance without the impact of items that are driven by general economic conditions and events that do not reflect the underlying fundamentals and trends in our operations.
Refer to "Items Adjusted from GAAP Measures" for the descriptions of the footnoted reconciling items.
The following tables reconcile our non-GAAP financial measures to their most directly comparable GAAP financial measure (amounts in millions, except percentages and per share amounts):
Three months ended March 31, 2026
Net sales Income before income taxes Net income attributable to Corning Incorporated Effective tax rate (a)(b) Per Share
As reported - GAAP $ 4,144 $ 529 $ 371 22.9 % $ 0.43
Constant-currency adjustment (1)
201 180 135 0.15
Translation gain on foreign denominated debt, net (2)
(6) (5) (0.01)
Translated earnings contract loss, net (3)
16 12 0.01
Acquisition-related costs (4)
45 34 0.04
Discrete tax items and other tax-related adjustments (5)
30 0.03
Restructuring, impairment and other charges and credits (6)
44 42 0.05
Pension mark-to-market adjustment (7)
(1) (1) (0.00)
Loss on investments (8)
6 6 0.01
Gain on sale of assets (9)
(16) (12) (0.01)
Core performance measures $ 4,345 $ 797 $ 612 18.5 % $ 0.70
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
(b)The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $37 million and $38 million, respectively.
Three months ended March 31, 2025
Net sales Income before income taxes Net income attributable to Corning Incorporated Effective tax rate (a)(b) Per Share
As reported - GAAP $ 3,452 $ 240 $ 157 22.9 % $ 0.18
Constant-currency adjustment (1)
227 180 168 0.19
Translation loss on foreign denominated debt, net (2)
43 33 0.04
Translated earnings contract loss, net (3)
101 77 0.09
Acquisition-related costs (4)
30 22 0.03
Discrete tax items and other tax-related adjustments (5)
(7) (0.01)
Restructuring, impairment and other charges and credits (6)
(7) (5) (0.01)
Pension mark-to-market adjustment (7)
(1) 0.00
Loss on investments (8)
5 5 0.01
Loss on sale of assets (9)
4 3 0.00
Loss on sale of business (10)
11 7 0.01
Litigation, regulatory and other legal matters (11)
10 7 0.01
Core performance measures $ 3,679 $ 616 $ 467 19.5 % $ 0.54
(a)Based upon statutory tax rates in the specific jurisdiction for each event.
(b)The calculation of the effective tax rate for GAAP and Core excludes net income attributable to non-controlling interest of approximately $28 million and $29 million, respectively.
Items Adjusted from GAAP Measures
Items adjusted from GAAP measures to arrive at core performance measures are as follows:
(1)Constant-currency adjustment: As a significant portion of revenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. The Company utilizes constant-currency reporting for Optical Communications, Glass Innovations and Automotive segments for the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro, as applicable to the segment. We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts. For the three months ended March 31, 2026 and 2025, the constant-currency adjustment primarily relates to our Japanese yen exposure due to the difference in the average spot rate compared to our core rate.
The constant-currency rates established for our core performance measures are long-term management-determined rates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts, cross-currency swaps and foreign-denominated debt.
Constant-currency rates used are as follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:
Currency Japanese yen South Korean won Chinese yuan New Taiwan dollar Mexican peso Euro
Rate ¥120 ₩1,250 ¥6.9 NT$31 MX$21 €0.88
(2)Translation of foreign denominated debt, net: Amount reflects the gain or loss on the translation of our yen-denominated and euro-denominated debt to U.S. dollars, net of gains or losses on related derivative instruments.
(3)Translated earnings contract, net: Amount reflects the impact of the realized and unrealized gains and losses on our derivative instruments used to hedge Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro foreign currency exposure related to translated earnings.
(4)Acquisition-related costs: Amount reflects intangible amortization, inventory valuation adjustments, contingent consideration adjustments and external acquisition-related deal costs, as well as other transaction related costs.
(5)Discrete tax items and other tax-related adjustments: Amount reflects certain discrete period tax items such as changes in tax law, the impact of tax audits, changes in tax reserves, changes in deferred tax asset valuation allowances and stock compensation windfall or shortfall, as well as other tax-related adjustments.
(6)Restructuring, impairment and other charges and credits: Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, including severance, accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations.
(7)Pension mark-to-market adjustment: Amount primarily reflects defined benefit pension mark-to-market gains and losses, which arise from changes in actuarial assumptions and the difference between actual and expected returns on plan assets and discount rates.
(8)Loss on investments: Amount reflects the loss recognized on investments due to mark-to-market adjustments for the change in fair value or the disposition of an investment.
(9)Gain or loss on sale of assets: Amount represents the gain or loss recognized for the sale of assets, recorded in cost of sales, on the consolidated statements of income.
(10)Loss on sale of business: Amount reflects the loss recognized for the sale of a business, recorded in other expense, net, on the consolidated statements of income.
(11)Litigation, regulatory and other legal matters: Amount reflects developments in commercial litigation, intellectual property disputes, adjustments to our estimated liability for environmental-related items and other legal matters.
LIQUIDITY AND CAPITAL RESOURCES
Our financial condition and liquidity are strong. We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in a material decrease in our liquidity. In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.
Our major sources of funding for 2026 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt. We believe we have sufficient liquidity to fund operations and meet our obligations for the foreseeable future. Such obligations may include requirements for acquisitions, capital expenditures, debt repayments, dividend payments and share repurchases. We will continue to generate cash from operations and maintain access to our revolving credit facility and commercial paper programs as discussed in more detail below.
Key Balance Sheet Data
We fund our working capital with cash from operations and, periodically, short-term and long-term borrowings. In addition, from time to time, we receive upfront cash from customers relating to long-term supply agreements, as well as cash incentives or tax credits from government entities primarily for capital expansion projects or for production related operating expenses.
The following table presents balance sheet and working capital measures (in millions):
March 31,
2026 		December 31,
2025
Working capital $ 3,610 $ 3,308
Current ratio 1.6:1 1.6:1
Trade accounts receivable, net of doubtful accounts $ 2,676 $ 2,779
Days sales outstanding 58 60
Inventories $ 3,279 $ 3,077
Inventory turns 3.3 3.3
Days payable outstanding (1)
70 63
Long-term debt $ 7,718 $ 7,630
Total debt $ 8,973 $ 8,434
Total debt to total capital 42 % 41 %
(1)Includes trade payables only.
We perform comprehensive reviews of our significant customers and their creditworthiness by analyzing their financial strength at least annually or more frequently for customers where we have identified a measure of increased risk. We closely monitor payments and developments to identify potential customer credit issues. We are not aware of any customer credit issues that could have a material impact on our liquidity.
We participate in accounts receivable management programs, including factoring arrangements to sell certain accounts receivable to third-party financial institutions or accelerate collections through our customer's supply chain financing arrangements. Sales of accounts receivable are reflected as a reduction of accounts receivable on the consolidated balance sheets and the proceeds are included in cash flows from operating activities in the consolidated statements of cash flows. During the months ended March 31, 2026 and 2025, we accelerated the collection of $288 million and $403 million, respectively, in accounts receivable. Related servicing fees for the period were not material.
Cash Flows
The following table presents a summary of cash flow data (in millions):
Three months ended
March 31,
2026 2025
Net cash provided by operating activities $ 362 $ 151
Net cash used in investing activities $ (203) $ (165)
Net cash provided by (used in) financing activities
$ 59 $ (403)
Net cash provided by operating activities for the three months ended March 31, 2026 improved when compared to the same period in the prior year, primarily driven by higher net income.
Net cash used in investing activities for the three months ended March 31, 2026 increased by $38 million when compared to the same period last year, primarily driven by higher capital expenditures of $124 million, partially offset by higher realized gains on our translated earnings contracts of $94 million.
Net cash provided by financing activities for the three months ended March 31, 2026 was $59 million compared to net cash used in financing activities of $403 million in the prior year. This activity is primarily driven by proceeds from the issuance of short-term borrowings during 2026 of $427 million.
As of March 31, 2026, our cash and cash equivalents and available credit capacity included (in millions):
March 31,
2026
Cash and cash equivalents $ 1,755
Available credit capacity:
U.S. dollar revolving credit facility $ 1,500
Cash and Cash Equivalents
As of March 31, 2026, we had $1.8 billion of cash and cash equivalents. Our cash and cash equivalents are held in various locations throughout the world and are generally unrestricted. We utilize a variety of strategies to ensure that our worldwide cash is available in the locations in which it is needed. As of March 31, 2026, approximately 67% of the consolidated cash and cash equivalents were held outside the U.S.
As of December 31, 2025, Corning had approximately $1.9 billion of indefinitely reinvested foreign earnings. If we distribute our foreign cash balances to the U.S. or to other foreign subsidiaries, we could be required to accrue and pay withholding taxes. We do not foresee a need to repatriate any earnings for which we asserted permanent reinvestment. However, to help fund cash needs of the U.S. or other international subsidiaries as they arise, we repatriate available cash from certain foreign subsidiaries whose earnings are not permanently reinvested.
Debt Facilities and Other Sources of Liquidity
We have a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes up to a maximum aggregate principal amount outstanding at any one time of $1.5 billion. Under this program, we may issue commercial paper from time to time and will use the proceeds for general corporate purposes. As of March 31, 2026, we did not have any commercial paper outstanding.
We have a revolving credit facility (the "Revolving Credit Facility") available to support obligations under the commercial paper program and for general corporate purposes, if needed. The Revolving Credit Facility provides a committed $1.5 billion in unsecured multi-currency line of credit and expires July 28, 2030. As of March 31, 2026, there were no outstanding amounts under the Revolving Credit Facility.
The agreement governing the Revolving Credit Facility includes affirmative and negative covenants with which we must comply, including a leverage (debt to capital ratio) financial covenant. As of March 31, 2026, we were in compliance with all such covenants. The required leverage ratio is a maximum of 60%. As of March 31, 2026, our leverage using this measure was approximately 42%.
Our debt instruments contain customary event of default provisions, which allow the lenders the option of accelerating all obligations upon the occurrence of certain events. In addition, some of our debt instruments contain a cross default provision, whereby an uncured default exceeding a specified amount on one debt obligation, also would be considered a default under the terms of another debt instrument. As of March 31, 2026, we were in compliance with all such provisions.
As a well-known seasoned issuer, we filed an automatic shelf registration statement with the SEC on April 24, 2026. Under this shelf registration statement we may offer, from time to time, debt securities, common stock, preferred stock, depository shares and warrants.
Refer to Note 10 (Debt) in the notes to the consolidated financial statements within the 2025 Form 10-K as well as Note 6 (Debt) in the accompanying notes to the consolidated financial statements for additional information.
Customer Deposits, Deferred Revenue and Government Incentives
We receive cash deposits or consideration, generally non-refundable, from customers under long-term supply agreements. In addition, we receive government incentives, typically in the form of cash incentives or tax credits primarily for capital expansion projects or for production related operating expenses.
Refer to Note 1 (Summary of Significant Accounting Policies) and Note 4 (Revenue) in the notes to the consolidated financial statements within the 2025 Form 10-K as well as Note 2 (Revenue) in the accompanying notes to the consolidated financial statements for additional information.
Uses of Cash
Share Repurchase Agreement
Pursuant to the Share Repurchase Agreement ("SRA") with Samsung Display Co., Ltd. ("SDC"), 22 million common shares held by SDC can be offered to be sold to Corning in specified tranches from time to time in calendar years 2024 through 2027. Corning may, at its sole discretion, elect to repurchase such common shares. If Corning elects not to repurchase the common shares and SDC sells the common shares on the open market, Corning is required to pay SDC a make-whole payment, subject to a 5% cap of the repurchase proceeds that otherwise would have been paid by Corning. As of March 31, 2026, the fair value of the liability associated with this option, measured using Level 2 inputs, was not material.
Refer to Note 16 (Shareholders' Equity) in the notes to the consolidated financial statements within the 2025 Form 10-K for additional information.
Share Repurchase Program
In 2019, the Board authorized the repurchase of up to $5.0 billion of additional common stock ("2019 Authorization").
As of March 31, 2026, approximately $3.0 billion remains available under our 2019 Authorization, which does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice.
Refer to Note 12 (Shareholders' Equity) in the accompanying notes to the consolidated financial statements for additional information.
Common Stock Dividends
The Board's decision to declare and pay future dividends will depend on our income and liquidity position, among other factors. We expect to declare quarterly dividends and fund payments with cash from operations.
Refer to Note 12 (Shareholders' Equity) in the accompanying notes to the consolidated financial statements for additional information.
Capital Expenditures
Capital expenditures were $332 million for the three months ended March 31, 2026. We expect our 2026 full year capital expenditures to be approximately $1.7 billion.
Current Maturities of Short and Long-Term Debt
As of March 31, 2026, we had $1.3 billion of long-term debt and short-term borrowings that is due in less than one year. Management monitors these upcoming maturities as part of its broader liquidity planning process and expects to settle them through a combination of cash generated from operations, existing cash balances, committed credit capacity, and, where appropriate, refinancing transactions. The Company's liquidity needs and the timing of any financing activities may be influenced by, among other things, market conditions, interest rates, and the availability of acceptable terms.
Refer to Note 10 (Debt) in the notes to the consolidated financial statements within the 2025 Form 10-K for additional information, including a summary of our debt maturities by year, and Note 6 (Debt) in the accompanying notes to the consolidated financial statements.
Defined Benefit Pension Plans
Our global pension plans, including our unfunded and non-qualified plans, were 85% funded as of December 31, 2025. Our largest single pension plan is our U.S. qualified plan, which accounted for 77% of our consolidated defined benefit pension plans' projected benefit obligation, was 97% funded as of December 31, 2025. The funded status of our pension plans is dependent upon multiple factors including actuarial assumptions, interest rates at year-end, prior investment returns and contributions made to the plans.
In 2026, the Company anticipates making voluntary cash contributions of $40 million to our domestic defined benefit pension plan and $12 million to the international pension plans.
Refer to Note 11 (Employee Retirement Plans) in the notes to the consolidated financial statements within the 2025 Form 10-K for additional information.
Commitments, Contingencies and Guarantees
There were no material changes outside the ordinary course of business in the obligations disclosed in Note 12 (Commitments and Contingencies and Guarantees) in the notes to the consolidated financial statements within the 2025 Form 10-K. A summary of details of our commitments related to executed leases that have not yet commenced are included within Note 8 (Leases) in the notes to the consolidated financial statements within the 2025 Form 10-K and Note 4 (Leases) in the accompanying notes to the consolidated financial statements.
Off Balance Sheet Arrangements
There were no material changes outside the ordinary course of business in off balance sheet arrangements as disclosed in the 2025 Form 10-K under the caption "Off Balance Sheet Arrangements."
ENVIRONMENT
Refer to Item 1. Legal Proceedings or Note 8 (Commitments and Contingencies) in the accompanying notes to the consolidated financial statements for information.
CRITICAL ACCOUNTING ESTIMATES
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. This requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. The estimates that are considered by management to be the most critical to the understanding of the consolidated financial statements as they require significant judgments that could materially impact our results of operations, financial position and cash flows are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 2025 Form 10-K. Since the date of the Company's most recent Annual Report, there were no material changes in the Company's critical accounting estimates or assumptions.
FORWARD-LOOKING STATEMENTS
The statements in this Quarterly Report on Form 10-Q, in reports subsequently filed by Corning with the Securities and Exchange Commission ("SEC") on Forms 10-Q and 8-K and related comments by management that are not historical facts or information and contain words such as "will," "believe," "anticipate," "expect," "intend," "plan," "seek," "see," "would," "target," "estimate," "forecast" or similar expressions are forward-looking statements. Such statements relate to future events that by their nature address matters that are, to different degrees, uncertain. These forward-looking statements relate to, among other things, the Company's Springboard plan, projected financial and operating performance, anticipated sales opportunities, long-term growth strategy, expected capital deployment, innovation and commercialization plans, and anticipated impacts of customer agreements.
Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, current estimates and forecasts, general economic conditions, its knowledge of its business and key performance indicators that impact the Company, there can be no assurance that these forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws.
Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:
-global economic trends, competition and geopolitical risks, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and other countries, and related impacts on our businesses' global supply chains and strategies;
-changes in macroeconomic and market conditions and market volatility, including developments and volatility arising from health crisis events, inflation, interest rates, the value of securities and other financial assets, precious metals, oil, natural gas, raw materials and other commodity prices and exchange rates (particularly between the U.S. dollar and the Japanese yen, South Korean won, Chinese yuan, New Taiwan dollar, Mexican peso and euro), decreases or sudden increases of consumer demand, and the impact of such changes and volatility on our financial position and businesses;
-the availability of or adverse changes relating to government grants, tax credits or other government incentives;
-the duration and severity of health crisis events, such as an epidemic or pandemic, and its impact across our businesses on demand, personnel, operations, our global supply chains and stock price;
-possible disruption in commercial activities or our supply chain due to terrorist activity, cyber-attack, armed conflict, political or financial instability, natural disasters, international trade disputes or major health concerns;
-loss of intellectual property due to theft, cyber-attack, or disruption to our information technology infrastructure;
-ability to enforce patents and protect intellectual property and trade secrets;
-disruption to Corning's, our suppliers' and manufacturers' supply chain, equipment, facilities, IT systems or operations;
-product demand and industry capacity;
-competitive products and pricing;
-availability and costs of critical components, materials, equipment, natural resources and utilities;
-new product development and commercialization;
-our solar business development, including manufacturing facility construction, ramp, and operations, and the achievement of solar revenue and profitability targets;
-order activity and demand from major customers;
-the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels;
-the amount and timing of any future dividends;
-the effects of acquisitions, dispositions and other similar transactions;
-the effect of regulatory and legal developments;
-ability to pace capital spending to anticipated levels of customer demand;
-our ability to increase margins through implementation of operational changes, pricing actions and cost reduction measures;
-rate of technology change;
-adverse litigation;
-product and component performance issues;
-retention of key personnel;
-customer ability to maintain profitable operations and obtain financing to fund ongoing operations and manufacturing expansions and pay receivables when due;
-loss of significant customers;
-changes in tax laws, regulations and international tax standards;
-the impacts of audits by taxing authorities; and
-the potential impact of legislation, government regulations, and other government action and investigations.
Corning Inc. published this content on May 01, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 01, 2026 at 14:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]