Corning Inc. (NYSE:GLW)

The financial data shows a general declining trend in the value of goodwill and other intangible assets for the periods analyzed. Goodwill increased significantly from 2019 to 2020, reaching a peak at 2,460 million US dollars. However, from 2020 onwards, it gradually declined each year, reaching 2,380 million US dollars in 2023. This suggests a reduction in either the valuation or acquisitions related to goodwill over these years.

Patents, trademarks, and trade names remained relatively stable throughout the period, with slight fluctuations but no significant upward or downward trend. The values hovered around the 469 to 500 million US dollars range, suggesting that the company's portfolio of these intangible assets was consistently maintained without major additions or disposals.

The customer lists and related intangible assets exhibited a moderate increase from 1,301 million US dollars in 2019 to 1,517 million in 2020, followed by a decline until 2022, before stabilizing in 2023 at a value close to 2019 levels. This pattern could indicate one-time acquisitions or revaluations in 2020, followed by amortization or disposals in subsequent years.

Gross amortized intangible assets increased notably in 2020 to 2,017 million US dollars from 1,770 million in 2019, then experienced a slight decline and stabilization around 1,957 million US dollars in the last two reported years. The accumulated amortization, conversely, consistently increased year-over-year, reflecting ongoing amortization charges reducing the net value of these assets. Specifically, accumulated amortization rose from -585 million US dollars in 2019 to -1,052 million US dollars in 2023, indicating substantial amortization expenses accumulated over time.

As a result, the net other intangible assets experienced a sharp decline over the period, dropping from 1,185 million US dollars in 2019 to 905 million US dollars in 2023. This decline reflects the combination of consistent amortization impacts against relatively stable or marginally declining gross asset values.

The aggregate value of goodwill and other intangible assets follows the broader trend of decline, increasing markedly in 2020 but then decreasing steadily through 2023. Starting at 3,120 million US dollars in 2019, it peaked at 3,768 million in 2020, then dropped each subsequent year to 3,285 million in 2023. This overall reduction could be indicative of impairments, amortization effects, or strategic decisions to divest or write down certain intangible assets over the later periods.

Total Assets

The reported total assets decreased slightly from US$28,898 million in 2019 to US$28,500 million in 2023, showing a modest downward trend over the five-year period. The adjusted total assets, which exclude goodwill, also declined from US$26,963 million in 2019 to US$26,120 million in 2023. This consistent decrease suggests a gradual reduction in asset base when adjusted for intangible assets.

Shareholders' Equity

The reported total Corning Incorporated shareholders’ equity decreased from US$12,907 million in 2019 to US$11,551 million in 2023, indicating a decline of approximately 10.5% over this period. The adjusted shareholders’ equity, which accounts for goodwill adjustments, showed a more pronounced decline from US$10,972 million in 2019 to US$9,171 million in 2023. This downward trend reflects a diminishing equity base, potentially affecting the company’s leverage and financial stability.

Comparative Observations

Both reported and adjusted figures for assets and equity exhibit a similar downward trajectory across the time frame. The adjusted totals consistently remain lower than the reported figures, highlighting the impact of goodwill adjustments. The declining adjusted equity trend is sharper than the reported figures, implying that intangible asset adjustments significantly influence the company’s net worth evaluation.

Overall Insights

The financial data points to a gradual contraction in the company's asset base and equity over the observed period, which may warrant further analysis into the underlying causes such as asset disposals, impairments, or operational challenges. The consistent gap between reported and adjusted figures underscores the significance of goodwill in the company’s financial structure and suggests cautious interpretation of reported equity and asset levels.

Total Asset Turnover

The reported total asset turnover ratio demonstrated a modest decline from 0.40 in 2019 to 0.37 in 2020, followed by a notable increase to a peak of 0.48 in 2022, before slightly decreasing to 0.44 in 2023. The adjusted total asset turnover, which excludes goodwill, follows a similar pattern but consistently reports higher values than the reported figures, indicating the exclusion of goodwill boosts asset turnover metrics. The adjusted ratio rose from 0.43 in 2019 to a high of 0.52 in 2022, then slightly dropped to 0.48 in 2023. This trend suggests improved efficiency in asset utilization over the medium term, with a marginal pullback in the most recent year.

Financial Leverage

Financial leverage ratios increased steadily over the five-year period in both reported and adjusted terms. The reported financial leverage showed an upward trend from 2.24 in 2019 to 2.47 in 2023, indicating a growing reliance on debt or other liabilities to finance assets. The adjusted financial leverage, which accounts for goodwill adjustments, is persistently higher, starting at 2.46 in 2019 and rising to 2.85 in 2023. This consistent increase in leverage, especially on an adjusted basis, suggests an escalating capital structure risk profile over time.

Return on Equity (ROE)

ROE experienced significant fluctuations across the years. Reported ROE dropped from 7.44% in 2019 to a low of 3.86% in 2020, followed by a strong recovery peaking at 15.45% in 2021. It then decreased to 10.96% in 2022 and further declined to 5.03% in 2023. The adjusted ROE shows a similar trend but at consistently higher levels, rising from 8.75% in 2019 to a peak of 19.23% in 2021 before declining to 6.34% in 2023. These variations suggest periods of improved profitability and efficiency, particularly in 2021, but also highlight volatility with reduced returns in the latest two years.

Return on Assets (ROA)

The reported ROA indicates a decline from 3.32% in 2019 to 1.66% in 2020, followed by an increased performance reaching 6.32% in 2021. It subsequently decreased to 4.46% in 2022 and further declined to 2.04% in 2023. Adjusted ROA values are consistently higher, starting at 3.56% in 2019, peaking at 6.87% in 2021, and declining to 2.22% in 2023. The ROA trends align closely with ROE, reflecting fluctuating profitability relative to total asset base, with a peak in 2021 and diminished performance in the last two years.

Overall Insights

The overall analysis of financial ratios reveals cyclical performance with marked improvement in asset efficiency and profitability mainly in 2021. The asset turnover ratios suggest effective use of assets during this period followed by a slight downturn. Financial leverage steadily increased over the observed period, indicating greater financial risk through increased debt levels. Profitability ratios, both ROE and ROA, are subject to volatility but show elevated returns when goodwill adjustments are considered, emphasizing the importance of intangible asset valuation in performance evaluation. The decreasing trends in profitability ratios from 2022 to 2023 warrant attention to underlying operational or market challenges impacting returns.

Total Assets

The reported total assets show a declining trend over the five-year period, decreasing from $28,898 million in 2019 to $28,500 million in 2023. Adjusted total assets, which account for goodwill adjustments, also follow a similar downward trajectory, declining from $26,963 million in 2019 to $26,120 million in 2023. This indicates a consistent reduction in asset base both on a reported and adjusted basis, with the adjusted figures being lower due to the exclusion of goodwill.

Total Asset Turnover

The reported total asset turnover ratio experienced a initial decrease from 0.40 in 2019 to 0.37 in 2020, followed by a significant increase reaching 0.48 in 2022, before dipping slightly to 0.44 in 2023. Similarly, the adjusted total asset turnover ratio also declined from 0.43 in 2019 to 0.40 in 2020, then rose to a peak of 0.52 in 2022, and slightly reduced to 0.48 in 2023. This reveals an improvement in the efficiency of asset utilization after 2020, with a peak in 2022, indicating better revenue generation per unit of asset, although a slight moderation occurred in 2023.

Overall Insights

The data suggests that although the company’s asset base has been gradually contracting, both reported and adjusted asset turnovers have improved after a dip in 2020. The increase in turnover ratios through 2021 and 2022 implies enhanced operational efficiency or revenue growth relative to the asset base during those years. However, the slight declines in asset turnover ratios in 2023 may warrant attention to sustain or improve asset utilization. Goodwill adjustments consistently reduce total asset values, resulting in slightly higher turnover ratios when adjusted figures are used, reflecting a more conservative asset valuation.

Total Assets

The reported total assets showed a gradual decline after an initial increase from 28,898 million US dollars in 2019 to 30,775 million in 2020, subsequently decreasing each year to 28,500 million by 2023. Adjusted total assets, which presumably exclude goodwill, reflected a similar but more pronounced downward trend, moving from 26,963 million in 2019 to 26,120 million in 2023. This indicates a consistent reduction in asset base, with adjustments showing a slightly steeper contraction.

Shareholders’ Equity

The reported shareholders’ equity increased slightly from 12,907 million in 2019 to a peak of 13,257 million in 2020, after which it declined steadily each year, reaching 11,551 million in 2023. The adjusted shareholders’ equity followed a similar pattern but started lower and declined more sharply over the period, falling from 10,972 million in 2019 to 9,171 million in 2023. This suggests that when goodwill or other intangible adjustments are considered, the equity position has weakened more significantly.

Financial Leverage

Financial leverage ratios, both reported and adjusted, demonstrated an upward trend throughout the period. Reported financial leverage increased from 2.24 in 2019 to 2.47 in 2023, while the adjusted financial leverage rose from 2.46 to 2.85 during the same timeframe. The higher adjusted leverage relative to reported figures implies that removing goodwill from the calculations reveals a higher dependency on debt financing, which has progressively intensified over the examined years.

Overall Analysis

The data reveal a consistent pattern of declining asset base and equity value, particularly once adjustments for goodwill are made. Concurrently, both reported and adjusted financial leverage metrics indicate a gradual increase, reflecting a trend toward higher financial risk and greater reliance on debt. The divergence between reported and adjusted figures highlights the impact of intangible assets on the company's financial structure, with the adjusted figures suggesting a more conservative and possibly more realistic view of financial health.

The data reflects the financial performance and shareholders’ equity of the company over a five-year period ending in 2023.

Reported shareholders’ equity

The reported total shareholders’ equity shows a slight increase from 2019 to 2020, rising from 12,907 million US dollars to 13,257 million US dollars. However, from 2020 onward, there is a consistent downward trend, decreasing to 12,333 million in 2021, 12,008 million in 2022, and further down to 11,551 million by 2023.

Adjusted shareholders’ equity

When adjusted for goodwill, total shareholders’ equity starts at 10,972 million US dollars in 2019 and declines steadily each year. It decreases to 10,797 million in 2020, then to 9,912 million in 2021, 9,614 million in 2022, and reaches 9,171 million in 2023. This consistent decline suggests the goodwill adjustment reveals a more pronounced erosion of equity over time.

Reported Return on Equity (ROE)

The reported ROE exhibits variability across the period. It begins at 7.44% in 2019, declines to 3.86% in 2020, then sharply rises to a peak of 15.45% in 2021. Afterward, it falls to 10.96% in 2022 and declines further to 5.03% in 2023. This pattern indicates fluctuating profitability relative to reported equity with a notable peak in 2021.

Adjusted Return on Equity (ROE)

Adjusted ROE follows a similar pattern to reported ROE but with higher percentage values. It starts at 8.75% in 2019, down to 4.74% in 2020, rises significantly to 19.23% in 2021, falls to 13.69% in 2022, and declines again to 6.34% in 2023. This suggests that when goodwill is excluded, the company’s return on the adjusted equity base is higher, especially pronounced during the peak year of 2021.

Total Assets

The reported total assets show a slight increase from 28,898 million USD in 2019 to a peak of 30,775 million USD in 2020, followed by a gradual decline each subsequent year, reaching 28,500 million USD in 2023. The adjusted total assets, which exclude goodwill, mirror this trend but at consistently lower levels, starting at 26,963 million USD in 2019, peaking at 28,315 million USD in 2020, and decreasing to 26,120 million USD by 2023. This indicates a downward adjustment of asset values over time, potentially reflecting goodwill impairments or revaluations.

Return on Assets (ROA)

The reported ROA shows fluctuating profitability relative to total assets. It declines significantly from 3.32% in 2019 to 1.66% in 2020, then increases sharply to 6.32% in 2021 before gradually falling again to 2.04% in 2023. The adjusted ROA, which considers the asset base without goodwill, follows a similar pattern but consistently exhibits slightly higher percentages than the reported ROA in each year. This suggests that the exclusion of goodwill leads to a higher calculated profitability ratio, emphasizing the impact of asset adjustments on profitability measures.

Overall Trends and Insights

Over the five-year period, asset values peaked in 2020 and have been on a generally declining trajectory since. Meanwhile, profitability as measured by ROA has shown volatility, with a notable peak in 2021. The adjustments for goodwill reduce total assets, leading to higher adjusted ROA figures, highlighting the influence of intangible assets on financial performance metrics. The decline in both reported and adjusted asset values after 2020 may warrant attention regarding asset management and valuation strategies.