Corning Inc. (NYSE:GLW)

The financial data reveals several noteworthy trends and patterns over the five-year period ending December 31, 2023.

Gross Margin and Cost of Sales

The gross margin as a percentage of net sales fluctuated, starting at 35.08% in 2019, declining to 31.24% in 2020, increasing to a peak of 35.95% in 2021, and then declining again to 31.23% by 2023. Correspondingly, the cost of sales remained relatively stable but with some volatility, ranging between approximately 64% and 69% of net sales, showing increases particularly in 2020 and again in 2022 and 2023.

Operating Expenses

Operating expenses as a percentage of net sales varied over the years. Selling, general, and administrative expenses generally represented a range from about 12.97% to 15.46%, peaking in 2020 and increasing again in 2023. Research, development, and engineering expenses decreased from 8.96% in 2019 to a low of 7.07% in 2021, before rising again to 8.55% in 2023. Amortization of purchased intangibles showed a slight decline but remained close to 1% of net sales throughout the period. Total operating expenses (sum of relevant categories) shifted accordingly, showing a minimum in 2021 around 20.96% and increasing to 24.16% by 2023.

Operating Income

Operating income exhibited significant fluctuation, declining sharply from 11.35% in 2019 to 4.5% in 2020, then rising strongly to 15% in 2021. It decreased again in successive years to 7.07% in 2023. This volatility may reflect the changes in both gross margin and operating expenses.

Interest Income and Expense

Interest income was low but generally increased over time, from 0.18% in 2019 to 0.3% in 2023. Interest expense also fluctuated, peaking at -2.61% in 2023, reflecting potentially higher borrowing costs or increased debt levels.

Other Income and Gains

Translated earnings contract gains showed positive contributions in most years except 2020, where it recorded a small loss. A noteworthy transaction-related gain was recorded in 2020 (4.41%) but was absent in other years. Other income (expense), net, shifted from a negative position in 2019 and 2020 to positive values in 2021 and 2022, declining again in 2023.

Income Before Taxes and Tax Provision

Income before income taxes followed a pattern similar to operating income, with a notable dip in 2020 (5.61%) and peak in 2021 (17.23%). It decreased steadily afterward to 6.48% in 2023. The provision for income taxes decreased in proportion to net sales over the period, from -2.23% in 2019 to -1.33% in 2023, with some fluctuation particularly in 2021.

Net Income and Earnings Attribution

Net income as a percentage of net sales experienced notable variability, decreasing sharply in 2020 to 4.63%, rising substantially to 13.74% in 2021, then declining in the following years to 5.15% in 2023. Net income attributable to Corning Incorporated mirrored this trend. Net income attributable to non-controlling interest increased in magnitude (more negative) through the years, reaching -0.53% in 2023. Net income available to common shareholders showed a similar pattern, with a low in 2020 (3.66%) and a peak in 2022 (9.27%), before falling to 4.62% in 2023.

Special Items

The Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock appeared only in earlier years (2019-2021), with a significant charge of -5.87% in 2021, and no such charges recorded in 2022 and 2023.

Overall, the data indicate a period marked by variability in profitability metrics, with 2021 standing out as a year of strong operating and net income performance. Costs of sales and operating expenses have shown cyclical increases and decreases, affecting margins. Interest expenses have increased over time, potentially impacting net income in later years. The absence of transaction-related gains after 2020 and the removal of preferred stock charges since 2022 may also influence profitability trends. The fluctuation in non-controlling interest and other income items adds further complexity to the profit picture. The financial performance suggests an ongoing effort to manage costs and operations amid possibly changing market and economic conditions.