Analysis of Income Taxes
- Income Tax Expense (Benefit)
- Effective Income Tax Rate (EITR)
- Components of Deferred Tax Assets and Liabilities
- Deferred Tax Assets and Liabilities, Classification
- Adjustments to Financial Statements: Removal of Deferred Taxes
- Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
- Adjusted Net Profit Margin
- Adjusted Total Asset Turnover
- Adjusted Financial Leverage
- Adjusted Return on Equity (ROE)
- Adjusted Return on Assets (ROA)
Paying user area
Try for free
Corning Inc. pages available for free this week:
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Corning Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Income Tax Expense (Benefit)
Corning Inc., income tax expense (benefit), continuing operations
US$ in millions
| 12 months ended: | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Federal | |||||||||||
| State and municipal | |||||||||||
| Foreign | |||||||||||
| Current | |||||||||||
| Federal | |||||||||||
| State and municipal | |||||||||||
| Foreign | |||||||||||
| Deferred | |||||||||||
| Provision for income taxes |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The data on current and deferred income tax expenses over the five-year period reveals several noteworthy trends and shifts in the company's tax provisioning.
- Current Income Tax Expense
- The current tax expense exhibits a fluctuating pattern. It started at 448 million US dollars in 2019, significantly dropped to 131 million in 2020, then increased sharply to 475 million in 2021. Following this peak, the expense slightly decreased to 457 million in 2022, before dropping more substantially to 243 million in 2023. This indicates volatility in the current tax payments, with a notable decrease in the most recent year compared to earlier peaks.
- Deferred Income Tax Expense
- The deferred tax figures show a more volatile and less predictable trend, oscillating between negative and positive values. The deferred tax expense began at a negative 192 million in 2019, indicating a tax benefit or reduction in tax liability. It moved closer to zero at negative 20 million in 2020, turned positive at 16 million in 2021, then reverted to negative amounts of 46 million and 75 million in 2022 and 2023 respectively. The negative values in deferred taxes in recent years imply recurring recognition of deferred tax assets or reductions in deferred tax liabilities, affecting overall tax provision dynamics.
- Provision for Income Taxes
- The overall provision for income taxes mirrors the combined effect of current and deferred taxes. It started at 256 million in 2019, declined to 111 million in 2020, rose sharply to a peak of 491 million in 2021, then decreased to 411 million in 2022, and declined further to 168 million in 2023. This pattern indicates variance largely driven by fluctuations in current tax expenses combined with the impact of deferred tax components, resulting in pronounced swings in the total tax provision.
In summary, the company experienced substantial variability in both current and deferred income tax expenses during the period examined. The marked increase in both current tax expense and total tax provision in 2021 stands out, followed by a steady decrease through to 2023. The deferred tax component’s volatility, alternating between negative and positive impacts, further contributes to the complexity of tax expense recognition and reflects underlying shifts in timing differences or valuation allowances related to tax positions. These trends warrant careful ongoing monitoring to understand the drivers behind these fluctuations and their implications for future tax planning and financial performance.
Effective Income Tax Rate (EITR)
Corning Inc., effective income tax rate (EITR) reconciliation
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Statutory U.S. Federal Income Tax Rate
- The statutory U.S. federal income tax rate remained constant at 21% throughout the analysis period from 2019 to 2023, indicating no changes in the base federal tax regulation during these years.
- Effective Tax Rate
- The effective tax rate exhibited some variability over the years, starting at 21.1% in 2019, decreasing significantly to 17.8% in 2020, then rising to 20.5% in 2021, peaking at 22.9% in 2022, and declining slightly to 20.6% in 2023. This fluctuation reflects the combined effects of various tax adjustments and provisions beyond the statutory rate.
- State Income Tax Provision (net of federal effect)
- This component showed an increase from 0.6% in 2019 to a peak of 1.4% in 2020, before declining steadily to negative territory (-0.3%) in 2023. The decline into a negative value in the last year suggests the presence of tax benefits or credits from state provisions offsetting other tax liabilities.
- Tax Credits
- Tax credits demonstrated significant volatility, with a notably large benefit in 2020 at -29.7%, contrasting with smaller negative values in other years. This sharp dip suggests an exceptional tax credit event in 2020, while the subsequent years maintain moderate credit benefits, increasing slightly to -6.9% by 2023.
- Non-Taxable Items
- Non-taxable items were not reported for the first four years but appeared at -4% in 2023, indicating a recent identification or reclassification of income or gains that are exempt from tax, thereby reducing the effective tax rate for the final year.
- Foreign Derived Intangible Income
- This category fluctuated with a negative impact on the tax rate each year it was reported, reaching -8.5% in 2019, disappearing in 2020, then varying between -1.3% and -2.7% in 2021 and 2022, with a slight reduction to -2.3% in 2023. The negative percentages imply ongoing tax benefits from foreign derived intangible income deductions or exclusions.
- Stock Compensation
- Stock compensation had a consistent but moderate negative impact on the tax rate, with values ranging from -0.6% to -2.1% across the years. The most considerable reduction occurred in 2023, suggesting increased stock-based compensation expenses or adjustments affecting taxable income.
- Remeasurement of Deferred Tax Assets and Liabilities
- Significant variability is observed in the remeasurement of deferred tax assets and liabilities, notably with a deep negative impact of -13.4% in 2020, a slight negative in other years, and near neutral in 2021. The 2020 anomaly may reflect substantial adjustments or changes in deferred tax expectations during that year.
- Legal Entity Rationalization
- This factor was only reported in 2020 with a negative adjustment of -2.2%, indicating a tax effect related to restructuring or consolidation of legal entities in that year, contributing to reducing the effective tax rate.
- Differential Arising from Foreign Earnings
- The differential arising from foreign earnings showed the most significant positive impact on the tax rate in 2020 at 15.2%, followed by a sharp decline in subsequent years to 0.3% in 2023. The substantial 2020 increase may indicate higher foreign income taxed at different rates or repatriation effects influencing the overall tax rate.
- Non-Deductible Items
- Non-deductible items displayed mixed variations, starting at 2.1% in 2019, rising to 7% in 2020, dropping to 1.4% in 2021, and resurging to 4.7% in 2023. These fluctuations suggest inconsistent recognition or classification of expenses that are not tax deductible, increasing the effective tax burden in certain years.
- Audit Settlements & Change in Reserve
- Audit settlements and reserve changes contributed positively to the tax rate each year, with rates ranging from 1.6% in 2021 to a high of 12.1% in 2020, indicating periodic tax charges due to prior audit outcomes or reserves adjustments.
- Valuation Allowance
- Valuation allowance fluctuated from a negative contribution of -3.7% in 2019, turning positive at 2.5% in 2020 and reaching 5.7% in 2023. This upward trend in allowance suggests increasing concerns or adjustments related to deferred tax asset realizability impacting taxable income.
- Intercompany Loan Adjustment
- The intercompany loan adjustment was sporadically present, showing a positive 6.2% in 2020 and smaller contributions in other years. This indicates occasional tax effects from intercompany financial arrangements affecting taxable income.
- Global Intangible Low-Taxed Income (GILTI)
- GILTI adjustments were generally minimal and moving between slightly positive and negative values, e.g., 1.2% in 2019 and -0.5% in 2020, suggesting a minor and unstable impact of this tax category throughout the period.
- Other Items, Net
- Other net items consistently contributed negatively but to a small degree, from -1% in 2019 to less intense impacts such as -0.1% and -0.5% in later years, indicating minor miscellaneous tax adjustments reducing the effective tax rate.
Components of Deferred Tax Assets and Liabilities
Corning Inc., components of deferred tax assets and liabilities
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data reveals several notable trends and patterns over the five-year period.
- Loss and Tax Credit Carryforwards
- These decreased from $388 million in 2019 to $275 million in 2023, with a peak of $637 million in 2020. The overall trend indicates a reduction, though with significant volatility.
- Other Assets
- Other assets declined from $345 million in 2019 to $200 million in 2021, then gradually increased to $245 million by 2023, showing a partial recovery after an initial drop.
- Research and Development Capitalization
- Data is available only from 2021 onwards, showing continuous growth from $81 million in 2021 to $362 million in 2023, suggesting increasing capitalization of R&D expenditures.
- Asset Impairments and Restructuring Reserves
- This category remained fairly stable around $30 million from 2019 to 2021, followed by a noticeable increase to $43 million in 2023, indicating rising restructuring activities or impairments in recent years.
- Postretirement Medical and Life Benefits
- There is a declining trend from $168 million in 2019 to $103 million in 2023, reflecting reduced obligations or benefit costs in this area.
- Other Accrued Liabilities
- These liabilities fell from $218 million in 2019 to $162 million in 2020, then sharply rose to $354 million in 2021, before slightly decreasing and stabilizing around $319 million by 2023. This indicates increased short-term obligations.
- Other Employee Benefits
- The figures are relatively stable, fluctuating narrowly between $329 million and $346 million throughout the period, showing consistent employee benefit liabilities.
- Gross Deferred Tax Assets
- There is an upward trend from $1,494 million in 2019 to $1,691 million in 2023, indicating growth in deferred tax assets over time.
- Valuation Allowances
- Negative valuation allowances decreased from -$215 million in 2019 to a low of -$138 million in 2021 but increased again to -$207 million by 2023, reflecting fluctuating assessments of realizability of deferred tax assets.
- Deferred Tax Assets
- Deferred tax assets show an increase from $1,279 million in 2019 to $1,484 million in 2023, with some variability in between, suggesting an overall strengthening in tax asset positions.
- Intangible and Other Assets
- These negative amounts increased in magnitude slightly, from -$110 million in 2019 to -$117 million in 2023, implying growing amortization or valuation adjustments.
- Fixed Assets
- Negative fixed assets were largest in 2020 at -$375 million, improving to -$223 million in 2023. This suggests a reduction in capital asset impairments or disposals over the latter period.
- Finance Leases
- The negative balances increased steadily from -$121 million in 2019 to -$209 million in 2023, indicating growing lease liabilities.
- Deferred Tax Liabilities
- These liabilities rose sharply from -$447 million in 2019 to a peak of -$630 million in 2020, then declined to -$549 million by 2023, showing an overall reduction after a spike.
- Net Deferred Tax Assets (Liabilities)
- Net deferred tax assets remained relatively stable in the $800 million range from 2019 to 2022, increasing to $935 million in 2023. This suggests a strengthening net tax asset position in the most recent year.
Deferred Tax Assets and Liabilities, Classification
Corning Inc., deferred tax assets and liabilities, classification
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Deferred tax liabilities (included in Other liabilities) |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Deferred Tax Assets
- The deferred tax assets exhibited a slight downward trend from 2019 through 2021, decreasing from 1,157 million US dollars in 2019 to 1,066 million US dollars in 2021. In 2022, there was a stabilization with a marginal increase to 1,073 million US dollars, followed by a more pronounced rebound in 2023 to 1,153 million US dollars, nearly reaching the initial level observed in 2019. This pattern indicates a recovery in the company's deferred tax assets after a period of decline.
- Deferred Tax Liabilities
- The deferred tax liabilities, categorized under other liabilities, showed a consistent downward trend over the entire five-year period. Starting from 325 million US dollars in 2019, these liabilities steadily decreased each year, reaching 218 million US dollars by 2023. This continuous decrease suggests effective management or resolution of deferred tax obligations over time.
- Overall Observation
- There is an observable inverse relationship between deferred tax assets and liabilities. While deferred tax assets initially declined then recovered, deferred tax liabilities steadily decreased year-over-year. The net effect suggests an improving tax position for the company, which may positively influence future cash flows and tax expenses.
Adjustments to Financial Statements: Removal of Deferred Taxes
Corning Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The analysis of the financial data over the period from 2019 to 2023 reveals several notable trends in the company's reported and adjusted figures.
- Total Assets
- Both reported and adjusted total assets show a gradual decline from 2020 onwards. Reported total assets peaked at US$30,775 million in 2020 before declining consistently each year to US$28,500 million by 2023. Adjusted total assets follow a similar pattern, decreasing from US$29,654 million in 2020 to US$27,347 million in 2023. This indicates a steady reduction in asset base over the recent years.
- Total Liabilities
- Reported total liabilities increased from US$15,901 million in 2019 to a high of US$17,609 million in 2021, then decreased gradually to US$16,632 million by 2023. Adjusted total liabilities mirror this trend with an increase from US$15,576 million in 2019 to US$17,351 million in 2021, followed by a decrease to US$16,414 million in 2023. This suggests a peak in liabilities in 2021, followed by deleveraging or repayment activities in subsequent years.
- Shareholders’ Equity
- Reported shareholders’ equity shows a declining trend, dropping from US$12,907 million in 2019 to US$11,551 million in 2023. Adjusted shareholders’ equity also declines from US$12,075 million to US$10,616 million over the same period. The reduction in equity aligns with the decrease in total assets and indicates potential impact from accumulated losses or distributions to shareholders.
- Net Income Attributable to the Company
- Net income exhibits significant volatility across the analyzed years. Reported net income decreased markedly from US$960 million in 2019 to US$512 million in 2020, then surged to US$1,906 million in 2021, before declining again to US$581 million by 2023. Adjusted net income shows a comparable pattern with a peak in 2021 (US$1,922 million), though values for 2023 are slightly lower than reported figures. This volatility suggests fluctuations in operational performance or extraordinary items affecting annual profitability.
- Summary of Patterns
- The data collectively show that the company experienced asset and equity contractions coupled with a peak in liabilities around 2021, followed by a gradual reduction thereafter. Earnings experienced a sharp rebound in 2021, contrasting with declines at the beginning and end of the period. The alignment of reported and adjusted data trends confirms the consistent direction of financial performance, despite differences in magnitude likely due to tax-related adjustments.
Corning Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Corning Inc., adjusted financial ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Net Profit Margin
- The reported net profit margin exhibited a noticeable fluctuation over the five-year period. Starting at 8.35% in 2019, it declined sharply to 4.53% in 2020, then surged to a peak of 13.54% in 2021 before trending downward again to 4.62% in 2023. The adjusted net profit margin followed a similar trajectory, though generally showing slightly lower values than the reported figures, indicating certain tax or accounting adjustments impacted profitability measurements. The peak in 2021 suggests a year of exceptionally strong operational performance or favorable tax impacts, while the subsequent decline points to challenges in maintaining those profit levels.
- Total Asset Turnover
- Both reported and adjusted total asset turnover ratios increased over the period, indicating improved efficiency in asset utilization. Reported ratios grew from 0.40 in 2019 to a high of 0.48 in 2022, followed by a minor decrease to 0.44 in 2023. Adjusted ratios were consistently marginally higher than reported ones, peaking at 0.50 in 2022 before slightly retreating. This overall upward trend reflects enhanced ability to generate revenue from the company’s asset base, although the slight dip in the final year suggests some slowing in asset productivity.
- Financial Leverage
- Financial leverage steadily increased throughout the period. Reported leverage rose from 2.24 in 2019 to 2.47 in 2023, while adjusted leverage showed a parallel rise from 2.30 to 2.58 over the same years. The incremental increases in leverage indicate a growing reliance on debt or other liabilities to finance assets, which can amplify returns but also heightens financial risk.
- Return on Equity (ROE)
- The reported ROE followed a volatile pattern: starting at 7.44% in 2019, it declined to 3.86% in 2020, then peaked sharply at 15.45% in 2021, before decreasing to 5.03% in 2023. The adjusted ROE generally mirrored this trend but was slightly higher for most years, notably reaching 16.68% in 2021 and receding to 4.77% in 2023. This indicates that tax and deferred income adjustments had a material impact on measured equity returns, with 2021 standing out as an optimal performance year. The later decrease signals deteriorating profitability from shareholders' perspective.
- Return on Assets (ROA)
- ROA showed a trend of improvement followed by decline. Reported ROA was 3.32% in 2019, dropped to 1.66% in 2020, then rose sharply to 6.32% in 2021, before gradually falling back to 2.04% in 2023. Adjusted ROA values were slightly lower overall but exhibited the same movement pattern. This indicates that the company managed asset utilization more effectively during 2021 but faced headwinds thereafter, with profitability on assets weakening in the most recent year.
- Summary of Trends
- Across the examined period, the company demonstrated considerable volatility in profitability measures, with a pronounced performance peak in 2021 followed by a decline through 2023. Asset efficiency showed improvement until 2022, with minor retraction afterwards. Financial leverage consistently increased, suggesting a strategic shift toward greater use of debt financing, which may contribute to the observed fluctuations in return metrics. Adjusted figures reveal that income tax and deferred tax effects meaningfully altered profitability assessments but did not materially change overall trend directions.
Corning Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Net profit margin = 100 × Net income attributable to Corning Incorporated ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Corning Incorporated ÷ Net sales
= 100 × ÷ =
- Reported net income attributable to Corning Incorporated
- The reported net income displays significant fluctuations over the five-year period. It started at $960 million in 2019, dropped sharply to $512 million in 2020, then surged to a peak of $1,906 million in 2021. After that peak, it declined to $1,316 million in 2022 and further decreased to $581 million in 2023. This pattern indicates volatility with a strong recovery in 2021 followed by a downward trend in the subsequent years.
- Adjusted net income attributable to Corning Incorporated
- The adjusted net income mirrors a similar pattern to the reported net income but with generally lower values. Beginning at $768 million in 2019, it decreased slightly to $492 million in 2020. A notable increase occurred in 2021, reaching $1,922 million, which is marginally higher than the reported figure for the same year. The adjusted income then fell to $1,270 million in 2022 and further declined to $506 million in 2023, showing consistent alignment with the reported income trends but reflecting adjustments that slightly reduce the net income levels.
- Reported net profit margin
- The reported net profit margin follows the fluctuations in net income, starting at 8.35% in 2019, nearly halving to 4.53% in 2020. It peaked at 13.54% in 2021, reflecting optimized profitability during that year. Then it declined to 9.27% in 2022 and further down to 4.62% in 2023, indicating a reduction in profitability relative to revenue in the most recent year.
- Adjusted net profit margin
- The adjusted net profit margin has a comparable trajectory to the reported margin but generally shows slightly lower percentages. It started at 6.68% in 2019, marginally decreased to 4.35% in 2020, and rose sharply to 13.65% in 2021, surpassing the reported margin for that year. Subsequently, it declined to 8.95% in 2022 and further to 4.02% in 2023. This pattern suggests the adjustments slightly moderate the profitability ratios but do not change the overall trend.
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
- Total Assets
-
Over the five-year period, both reported and adjusted total assets exhibited a fluctuating trend with an initial increase followed by a gradual decline. Reported total assets rose from 28,898 million US dollars at the end of 2019 to a peak of 30,775 million in 2020, then decreased to 28,500 million by the end of 2023. Adjusted total assets followed a similar pattern, increasing from 27,741 million in 2019 to 29,654 million in 2020 and subsequently declining to 27,347 million in 2023. This indicates a conservative adjustment leading to lower asset values compared to reported figures, but both measures show overall contraction after 2020.
- Total Asset Turnover
-
The total asset turnover ratio, representing revenue generated per unit of asset, showed improvement over the period, especially in the adjusted figures. Reported total asset turnover decreased from 0.4 in 2019 to 0.37 in 2020, then sharply increased to 0.47 in 2021 and peaked at 0.48 in 2022 before slightly declining to 0.44 in 2023. Adjusted total asset turnover exhibits a consistent improvement trend, moving from 0.41 in 2019 to 0.46 in 2023, reaching the highest point of 0.5 in 2022. These trends suggest enhanced efficiency in asset utilization over time, particularly when considering adjusted data that might account for deferred tax impacts.
- Overall Insights
-
The data reveals a period of asset base expansion through 2020, followed by contraction until 2023 in both reported and adjusted terms. Despite the decrease in asset size after 2020, the improvement in total asset turnover ratios suggests that the company enhanced its effectiveness in generating revenue from its asset base. The adjusted figures consistently show a slightly lower level of assets but a marginally higher asset turnover ratio, indicating that tax adjustments may refine the assessment of operational efficiency. The peak in asset turnover metrics in 2022, followed by a slight dip in 2023, may point to a temporary peak in operational efficiency or changes in market conditions affecting asset utilization.
Adjusted Financial Leverage
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Financial leverage = Total assets ÷ Total Corning Incorporated shareholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Corning Incorporated shareholders’ equity
= ÷ =
The analysis reveals several notable trends in the company's financial position and leverage over the five-year period from the end of 2019 through the end of 2023.
- Total Assets
- Both reported and adjusted total assets show a gradual decline after peaking in 2020. Reported total assets increased from US$28,898 million in 2019 to US$30,775 million in 2020, then decreased consistently each year to US$28,500 million by 2023. Similarly, adjusted total assets rose from US$27,741 million in 2019 to US$29,654 million in 2020 before steadily declining to US$27,347 million in 2023. This pattern indicates an initial growth followed by a slow contraction in the asset base.
- Shareholders’ Equity
- Reported total shareholders’ equity increased from US$12,907 million in 2019 to a peak of US$13,257 million in 2020, then declined year-over-year to US$11,551 million by 2023. Adjusted shareholders’ equity follows the same trajectory, rising from US$12,075 million in 2019 to US$12,449 million in 2020 and subsequently decreasing to US$10,616 million in 2023. This decline in equity after 2020 suggests a weakening in net asset value or increased distributions relating to financial adjustments.
- Financial Leverage
- There is a consistent upward trend in both reported and adjusted financial leverage ratios over the period. Reported financial leverage rose from 2.24 in 2019 to 2.47 in 2023, while adjusted financial leverage increased from 2.3 to 2.58 in the same timeframe. The increasing leverage ratios indicate that the company has progressively taken on more debt relative to equity, which could suggest higher financial risk or a strategy favoring debt financing.
Overall, the data reflects a cyclical pattern of asset and equity growth reaching a peak in 2020 followed by a gradual decline through 2023, coupled with steadily increasing leverage ratios. This combination may imply pressures on equity funding and an increasing reliance on debt, warranting careful monitoring of financial risk measures moving forward.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 ROE = 100 × Net income attributable to Corning Incorporated ÷ Total Corning Incorporated shareholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Corning Incorporated ÷ Adjusted total Corning Incorporated shareholders’ equity
= 100 × ÷ =
- Net Income Trends
- The reported net income attributable to the company showed considerable volatility over the period. It started at $960 million at the end of 2019, dropped sharply to $512 million in 2020, then surged to $1,906 million in 2021 before declining again to $1,316 million in 2022 and further to $581 million in 2023. The adjusted net income followed a similar pattern with slight variations in absolute values, reflecting adjustments for reported tax impacts. The notable peak in 2021 suggests a significant recovery or one-time gain during that year, whereas the subsequent declines indicate either operational challenges or other detracting factors.
- Shareholders’ Equity Trends
- Reported total shareholders’ equity displayed a gradual decreasing trend from $12,907 million in 2019 to $11,551 million in 2023. The adjusted shareholders’ equity mirrored this downward trend but with slightly lower values, indicating that adjustments for deferred income tax impacted the equity downward consistently. This steady decrease over five years suggests either distributions to shareholders, losses, or other equity-reducing activities outweighing new equity gains.
- Return on Equity (ROE) Trends
- The reported ROE exhibited substantial fluctuations, decreasing from 7.44% in 2019 to 3.86% in 2020, then spiking significantly to 15.45% in 2021. Thereafter, ROE declined to 10.96% in 2022 and further dropped to 5.03% in 2023. The adjusted ROE values generally paralleled this pattern, with a slightly higher peak of 16.68% in 2021 and a lower level of 4.77% by 2023. The pronounced ROE peak and subsequent decline align with the net income trends and reflect changes in profitability relative to the equity base after tax adjustments.
- Overall Observations
- The financial data indicates a period of volatility with significant swings in profitability and returns on equity. The peak performance year of 2021 contrasts with weaker results in other years, suggesting that the company experienced irregular events or market conditions impacting earnings. The steady decline in shareholders’ equity combined with fluctuating net income and ROE suggests ongoing challenges in maintaining consistent profitability and equity growth. Tax-related adjustments had a modest but noticeable effect on reported equity and profitability metrics, emphasizing the importance of considering deferred tax impacts in comprehensive financial analysis.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 ROA = 100 × Net income attributable to Corning Incorporated ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Corning Incorporated ÷ Adjusted total assets
= 100 × ÷ =
- Net Income Trends
- Reported net income attributable to Corning Incorporated experienced a notable decline from 960 million US dollars in 2019 to 512 million in 2020, followed by a significant increase to 1,906 million in 2021. Subsequently, there was a decrease to 1,316 million in 2022, and further reduction to 581 million in 2023. The adjusted net income figures exhibit a similar pattern, starting at 768 million in 2019, dipping to 492 million in 2020, peaking at 1,922 million in 2021, then declining to 1,270 million in 2022, and 506 million in 2023. This indicates volatility with a peak in 2021 and a downward trend thereafter.
- Asset Base Developments
- Reported total assets showed gradual fluctuation over the five-year period, increasing from 28,898 million US dollars in 2019 to a high of 30,775 million in 2020, then decreasing to 30,154 million in 2021, 29,499 million in 2022, and further down to 28,500 million in 2023. Adjusted total assets followed a comparable trajectory, starting at 27,741 million in 2019, rising to 29,654 million in 2020, and then progressively decreasing each year to reach 27,347 million in 2023. This pattern suggests a peak in asset size around 2020, with gradual contraction thereafter.
- Return on Assets (ROA) Analysis
- The reported ROA showed significant variation, declining sharply from 3.32% in 2019 to 1.66% in 2020, then rebounding strongly to 6.32% in 2021, followed by a decrease to 4.46% in 2022, and a further drop to 2.04% in 2023. Adjusted ROA values mirror this trend closely, starting at 2.77% in 2019, stabilizing at 1.66% in 2020, peaking slightly higher at 6.61% in 2021, and then declining to 4.47% in 2022 and 1.85% in 2023. These fluctuations reflect variability in asset profitability, with a peak performance year in 2021 and reduced efficiency in subsequent years.
- Overall Insights
- The data reveals that Corning Inc. experienced marked volatility in profitability and asset utilization over the five-year period. Net income and ROA peaked in 2021, indicating a strong performance that year, followed by a consistent decline through 2023. The asset base peaked in 2020, with a steady decrease in total assets thereafter, which may have influenced the downward trend in profitability metrics. The alignment between reported and adjusted figures suggests that tax adjustments did not significantly alter the overall financial trends but provided a slightly more conservative view on earnings and returns.