Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Corning Inc., profitability 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).
The analysis of the financial ratios over the five-year period reveals notable fluctuations across most key profitability and efficiency metrics.
- Gross Profit Margin
- The gross profit margin showed variability, starting at 35.08% in 2019, declining to 31.24% in 2020, rebounding to 35.95% in 2021, and then decreasing again to levels just above 31% in the subsequent two years. This indicates some instability in the company’s core production efficiency or cost of goods sold management.
- Operating Profit Margin
- The operating profit margin exhibited significant volatility. It began at 11.35% in 2019, dropped sharply to 4.5% in 2020, surged to 15.00% in 2021, and then declined gradually over the next two years to 7.07%. This suggests fluctuating operational efficiency and possibly varying levels of operating expenses impacting profitability.
- Net Profit Margin
- Net profit margin followed a pattern somewhat similar to operating margin, starting at 8.35% in 2019, declining to 4.53% in 2020, peaking at 13.54% in 2021, and then steadily decreasing to 4.62% by 2023. The rise in 2021 may indicate a one-off positive influence or improved cost control, but the subsequent decline points to challenges in sustaining net profitability.
- Return on Equity (ROE)
- Return on equity ranged from a low of 3.86% in 2020 to a high of 15.45% in 2021, with intermediate values of 7.44% in 2019, 10.96% in 2022, and a lower 5.03% in 2023. This variability reflects changes in the company’s ability to generate profit from shareholders’ equity, aligning closely with the net profit trends.
- Return on Assets (ROA)
- The return on assets increased from 3.32% in 2019 to 6.32% in 2021, but afterward, it declined to 4.46% in 2022 and further to 2.04% in 2023. This suggests that asset utilization efficiency improved up to 2021 but weakened considerably in the last two years, indicating less effective use of assets to generate earnings.
Overall, the company's performance peaked in 2021 across most profitability and efficiency ratios, followed by a marked decline during the two subsequent years. This pattern may point to external factors impacting profitability or internal challenges in maintaining operational and asset efficiency.
Return on Sales
Return on Investment
Gross Profit Margin
Corning Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | 3,931) | 4,506) | 5,063) | 3,531) | 4,035) | |
| Net sales | 12,588) | 14,189) | 14,082) | 11,303) | 11,503) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 31.23% | 31.76% | 35.95% | 31.24% | 35.08% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Apple Inc. | 44.13% | 43.31% | 41.78% | 38.23% | 37.82% | |
| Arista Networks Inc. | 61.95% | 61.07% | 63.80% | 63.94% | — | |
| Cisco Systems Inc. | 62.73% | 62.55% | 64.02% | 64.26% | 62.94% | |
| Dell Technologies Inc. | 22.18% | 21.63% | 31.22% | 31.40% | — | |
| Super Micro Computer Inc. | 18.01% | 15.40% | 15.03% | 15.76% | 14.16% | |
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).
1 2023 Calculation
Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × 3,931 ÷ 12,588 = 31.23%
2 Click competitor name to see calculations.
- Net Sales
- The net sales exhibit a fluctuating trend over the five-year period. There was a slight decline from 11,503 million US dollars in 2019 to 11,303 million in 2020. This was followed by a significant increase to 14,082 million in 2021. The sales volume remained relatively stable, with 14,189 million in 2022, before declining to 12,588 million in 2023. Overall, net sales demonstrate variability with a peak in 2022 and a subsequent decrease in the latest year.
- Gross Margin
- The gross margin also reveals a variable pattern across the years. It started at 4,035 million US dollars in 2019, decreased to 3,531 million in 2020, and reached a peak of 5,063 million in 2021. However, it declined again to 4,506 million in 2022 and further to 3,931 million in 2023. The fluctuations in gross margin generally mirror the changes observed in net sales, suggesting a correlation between sales volume and gross profit in absolute terms.
- Gross Profit Margin Percentage
- The gross profit margin percentage shows noticeable volatility. Beginning at 35.08% in 2019, it dropped to 31.24% in 2020, then rose to a high of 35.95% in 2021. The percentage decreased again to 31.76% in 2022 and marginally declined to 31.23% in 2023. Despite the fluctuations, the gross profit margin indicates a contraction in profitability relative to sales after 2021, stabilizing around the low 31% range in the most recent years.
- Summary of Trends
- The data reflects that the company experienced peak performance in terms of sales and profitability in 2021, with the highest net sales and gross margin values and gross profit margin percentage. The subsequent two years show a downward correction in both revenue and profitability percentages. The declining gross profit margin percentage post-2021 suggests increasing cost pressures or changes in pricing power, impacting overall profitability despite fluctuations in sales volumes. The recent figures in 2023 indicate a contraction phase relative to the peak performance observed in 2021.
Operating Profit Margin
Corning Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 890) | 1,438) | 2,112) | 509) | 1,306) | |
| Net sales | 12,588) | 14,189) | 14,082) | 11,303) | 11,503) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 7.07% | 10.13% | 15.00% | 4.50% | 11.35% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Apple Inc. | 29.82% | 30.29% | 29.78% | 24.15% | 24.57% | |
| Arista Networks Inc. | 38.52% | 34.86% | 31.37% | 30.19% | — | |
| Cisco Systems Inc. | 26.37% | 27.09% | 25.76% | 27.63% | 27.39% | |
| Dell Technologies Inc. | 5.64% | 4.60% | 5.46% | 2.85% | — | |
| Super Micro Computer Inc. | 10.68% | 6.45% | 3.48% | 2.57% | 2.78% | |
| Operating Profit Margin, Sector | ||||||
| Technology Hardware & Equipment | 24.86% | 25.14% | 24.78% | 19.76% | — | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 24.49% | 26.43% | 26.73% | 22.69% | — | |
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).
1 2023 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 890 ÷ 12,588 = 7.07%
2 Click competitor name to see calculations.
- Operating Income
- The operating income exhibits significant volatility over the five-year period. Starting at $1,306 million in 2019, it sharply declined to $509 million in 2020. This was followed by a notable recovery to $2,112 million in 2021, the highest point in the series. However, after 2021, operating income decreased again to $1,438 million in 2022 and further declined to $890 million in 2023. Overall, the trend indicates instability with a peak in 2021 and a downward trajectory afterward.
- Net Sales
- Net sales remained relatively stable from 2019 to 2020, decreasing slightly from $11,503 million to $11,303 million. This steadiness was followed by a strong increase in 2021, reaching $14,082 million, which was maintained at a similar level in 2022 with $14,189 million. In 2023, net sales experienced a decline to $12,588 million. The data suggests growth through 2021 and 2022, but a reduction in sales during the most recent year.
- Operating Profit Margin
- The operating profit margin started at 11.35% in 2019 and fell markedly to 4.5% in 2020, reflecting the impact on profitability during that period. It then increased significantly to 15% in 2021, aligning with the peak in operating income and net sales growth. Subsequently, the margin decreased to 10.13% in 2022 and continued to decline to 7.07% in 2023. This fluctuating pattern indicates variable profitability, peaking in 2021 followed by a downward trend over the two most recent years.
- Overall Insights
- The data presents a pattern of volatility in key financial metrics over the examined period. After a decline in 2020 likely due to external or internal challenges, there was a strong recovery in both sales and profitability in 2021. Nevertheless, both operating income and operating margins have shown a decline from 2021 through 2023. Net sales followed a similar trajectory with stabilization after growth, then dropping in the final year. These trends highlight potential challenges in sustaining profitability and sales growth beyond the peak experienced in 2021.
Net Profit Margin
Corning Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Corning Incorporated | 581) | 1,316) | 1,906) | 512) | 960) | |
| Net sales | 12,588) | 14,189) | 14,082) | 11,303) | 11,503) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 4.62% | 9.27% | 13.54% | 4.53% | 8.35% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Apple Inc. | 25.31% | 25.31% | 25.88% | 20.91% | 21.24% | |
| Arista Networks Inc. | 35.62% | 30.87% | 28.52% | 27.38% | — | |
| Cisco Systems Inc. | 22.13% | 22.91% | 21.26% | 22.75% | 22.39% | |
| Dell Technologies Inc. | 2.39% | 5.50% | 3.45% | 5.01% | — | |
| Super Micro Computer Inc. | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% | |
| Net Profit Margin, Sector | ||||||
| Technology Hardware & Equipment | 20.66% | 21.34% | 21.20% | 17.54% | — | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 20.39% | 22.45% | 23.62% | 19.67% | — | |
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).
1 2023 Calculation
Net profit margin = 100 × Net income attributable to Corning Incorporated ÷ Net sales
= 100 × 581 ÷ 12,588 = 4.62%
2 Click competitor name to see calculations.
- Net Income Attributable to Corning Incorporated
- The net income exhibited notable fluctuations over the five-year period. It decreased significantly from 960 million USD in 2019 to 512 million USD in 2020, representing nearly a 47% decline. Subsequently, there was a strong recovery in 2021, with net income rising sharply to 1,906 million USD, the highest in the period observed. However, the following years showed a downward trend, with net income decreasing to 1,316 million USD in 2022 and further dropping to 581 million USD in 2023. This pattern indicates volatility in profitability, with a peak in 2021 followed by two consecutive years of decline.
- Net Sales
- Net sales remained relatively stable from 2019 through 2020, with a slight decline from 11,503 million USD to 11,303 million USD. There was a subsequent increase in 2021 and 2022, reaching a peak of 14,189 million USD in 2022. In 2023, net sales decreased to 12,588 million USD but remained above the 2019 and 2020 levels. The overall trend shows growth in net sales until 2022, followed by a contraction in the latest year.
- Net Profit Margin
- The net profit margin mirrored the volatility observed in net income. It declined from 8.35% in 2019 to 4.53% in 2020, aligning with the fall in profitability. A substantial recovery occurred in 2021, where the margin reached 13.54%, the highest percentage in the period, indicating improved efficiency or pricing power. This positive momentum diminished in 2022 with the margin dropping to 9.27%, and further declined sharply to 4.62% by 2023. The margin trajectory reflects significant pressure on profitability in the latter years despite relatively stable sales performance.
- Summary Insights
- Over the period analyzed, the company experienced considerable volatility in its profitability metrics. While net sales showed a general upward trend until 2022, net income and profit margins were more variable, peaking in 2021 before declining substantially by 2023. The divergence between stable sales and declining profitability in recent years suggests potential cost pressures, changes in product mix, or external market factors impacting the company's earnings quality and operational efficiency.
Return on Equity (ROE)
Corning Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Corning Incorporated | 581) | 1,316) | 1,906) | 512) | 960) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Profitability Ratio | ||||||
| ROE1 | 5.03% | 10.96% | 15.45% | 3.86% | 7.44% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Apple Inc. | 156.08% | 196.96% | 150.07% | 87.87% | 61.06% | |
| Arista Networks Inc. | 28.91% | 27.68% | 21.13% | 19.11% | — | |
| Cisco Systems Inc. | 28.44% | 29.70% | 25.66% | 29.57% | 34.62% | |
| Dell Technologies Inc. | — | — | 131.10% | — | — | |
| Super Micro Computer Inc. | 32.45% | 20.00% | 10.20% | 7.91% | 7.64% | |
| ROE, Sector | ||||||
| Technology Hardware & Equipment | 101.96% | 124.98% | 97.82% | 69.73% | — | |
| ROE, Industry | ||||||
| Information Technology | 32.00% | 39.15% | 42.48% | 35.75% | — | |
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).
1 2023 Calculation
ROE = 100 × Net income attributable to Corning Incorporated ÷ Total Corning Incorporated shareholders’ equity
= 100 × 581 ÷ 11,551 = 5.03%
2 Click competitor name to see calculations.
- Net Income
- The net income attributable to the company exhibited significant fluctuations over the five-year period. Starting at $960 million in 2019, there was a sharp decline to $512 million in 2020. This was followed by a strong recovery and peak at $1,906 million in 2021. Subsequently, net income declined again to $1,316 million in 2022 and further decreased to $581 million in 2023, indicating considerable volatility and recent downward pressure.
- Total Shareholders’ Equity
- Total shareholders’ equity showed a gradual downward trend after an initial increase. It rose slightly from $12,907 million in 2019 to $13,257 million in 2020. However, from 2020 onwards, equity declined steadily each year, reaching $11,551 million in 2023. This continuous reduction suggests possible distributions to shareholders or losses not fully reflected in net income changes.
- Return on Equity (ROE)
- ROE mirrored the trends observed in net income with pronounced variability. The ratio started at 7.44% in 2019 before dropping sharply to 3.86% in 2020. It then surged to a high of 15.45% in 2021, reflecting strong profitability relative to equity. However, the ROE decreased substantially thereafter, reaching 5.03% in 2023, which indicates a weakening capacity to generate profits from shareholders' equity in recent years.
- Summary Insights
- The data reveals a pattern of high volatility in profitability metrics across the observed periods. After substantial improvement in 2021, both net income and ROE have declined significantly by 2023, suggesting challenges in maintaining profitability. Concurrently, shareholders' equity has been declining steadily since 2020, which may signal ongoing capital return strategies or retained losses. Overall, the recent downward trends in profitability and equity warrant attention regarding sustaining financial stability and shareholder value.
Return on Assets (ROA)
Corning Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Corning Incorporated | 581) | 1,316) | 1,906) | 512) | 960) | |
| Total assets | 28,500) | 29,499) | 30,154) | 30,775) | 28,898) | |
| Profitability Ratio | ||||||
| ROA1 | 2.04% | 4.46% | 6.32% | 1.66% | 3.32% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Apple Inc. | 27.51% | 28.29% | 26.97% | 17.73% | 16.32% | |
| Arista Networks Inc. | 20.98% | 19.96% | 14.66% | 13.39% | — | |
| Cisco Systems Inc. | 12.38% | 12.57% | 10.86% | 11.82% | 11.88% | |
| Dell Technologies Inc. | 2.73% | 6.00% | 2.63% | 3.88% | — | |
| Super Micro Computer Inc. | 17.42% | 8.90% | 4.99% | 4.39% | 4.27% | |
| ROA, Sector | ||||||
| Technology Hardware & Equipment | 20.58% | 21.62% | 18.88% | 13.59% | — | |
| ROA, Industry | ||||||
| Information Technology | 12.52% | 14.57% | 14.67% | 11.45% | — | |
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).
1 2023 Calculation
ROA = 100 × Net income attributable to Corning Incorporated ÷ Total assets
= 100 × 581 ÷ 28,500 = 2.04%
2 Click competitor name to see calculations.
- Net Income
- Net income shows a fluctuating trend over the observed period. It decreased sharply from 960 million US dollars in 2019 to 512 million in 2020, reflecting a significant decline. In 2021, net income rebounded strongly to 1906 million, marking the highest value within the timeframe. Following this peak, it declined to 1316 million in 2022 and further dropped to 581 million in 2023, indicating a downward trend in recent years.
- Total Assets
- Total assets experienced minor variations, with a slight increase from 28898 million US dollars in 2019 to 30775 million in 2020. Subsequently, total assets decreased gradually over the next three years, falling to 30154 million in 2021, then to 29499 million in 2022, and finally to 28500 million in 2023. This suggests a slow contraction in the asset base following the initial growth.
- Return on Assets (ROA)
- The return on assets proportionally mirrors the net income trend. ROA declined from 3.32% in 2019 to 1.66% in 2020, signaling a reduction in asset profitability. There was a notable improvement in 2021 to 6.32%, coinciding with the peak net income year. However, ROA decreased again to 4.46% in 2022 and dropped further to 2.04% in 2023, demonstrating diminishing returns on the company's assets over the last two years.
- Overall Analysis
- The financial data reveals a period of volatility, characterized by a sharp decline in profitability at the onset of 2020, followed by a robust recovery in 2021. The subsequent two years saw declines in both net income and ROA, alongside a gradual decrease in total assets. This pattern indicates that while the company experienced a temporary rebound, challenges persisted in maintaining profitability and asset growth toward the end of the period.