Corning Withdraws Fourth-Quarter and 2009 Guidance

Plans restructuring charges amid global recession

CORNING, N.Y.--(BUSINESS WIRE)--Citing declining LCD glass demand, James B. Flaws, Corning Incorporated’s vice chairman and chief financial officer, will announce today that the company has withdrawn its previously disclosed financial guidance for the fourth quarter and 2009.

“We continue to believe that the long-term fundamentals remain strong in each of the primary markets where we compete: LCD glass, automotive and diesel emission substrates and filters, and telecommunications. We should be well positioned when the economy begins to turn around”

Speaking at the UBS Technology Conference in New York this morning, Flaws will say, “Panel makers, particularly those in Taiwan, have continued to reduce the utilization of their factories heading into the second half of this quarter in response to weakened retail demand for LCD televisions and desktop monitors. Demand in our wholly owned display glass business has dropped more precipitously than we expected just a few weeks ago. We are also seeing additional, but less severe, reductions in demand at Samsung Corning Precision Glass Co. Ltd., our equity company in Korea.”

Flaws will say, “We now expect our fourth-quarter sales to be below our guidance range of $1.1 billion to $1.2 billion, and earnings per share to be at the low end or below our guidance range of $0.20 to $0.28*. The retail environment and the LCD supply chain are both extremely uncertain. As a result, since the display business is a significant contributor to our overall results, we are unable to offer revised guidance for the fourth quarter or for 2009 at this time.”

He will add that the company will make further LCD glass manufacturing capacity reductions in the fourth quarter, with a resulting impact on gross margins in the Display Technologies segment and the company overall. He will note that Corning will have restructuring charges in both the fourth quarter of this year and in the first half of 2009 as the company adjusts its capacity and fixed cost structure to reflect the lower demand. Corning plans to update investors on the business environment on December 10 at the Barclay’s Technology Conference in San Francisco.

As previously announced, the global economic difficulties have been impacting all of Corning’s businesses and the company is initiating actions to reduce capital spending, scale back some manufacturing operations, curb the rate of growth in research, development and engineering expenses, and reduce overhead to manage costs.

*This is a non-GAAP financial measure. The reconciliation between GAAP and non-GAAP measures is provided in the table following this news release, as well as on the company’s investor relations website.

“The latest economic news indicates that we may be facing a prolonged global recession. However, we believe that Corning’s strong financial position will allow us to endure an extended downturn in the economy. We have $3.2 billion in cash and short-term investments and $1.5 billion of debt, only $250 million of which is due in the next four years.

“We continue to believe that the long-term fundamentals remain strong in each of the primary markets where we compete: LCD glass, automotive and diesel emission substrates and filters, and telecommunications. We should be well positioned when the economy begins to turn around,” Flaws will conclude.

Corning’s presentation to investors at the UBS Global Technology and Services Conference will be available beginning at 8:45 a.m. ET via webcast by accessing the investor events calendar on Corning’s Web site at www.corning.com/investor_relations.

Presentation of Information in this News Release

Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP. Corning’s non-GAAP net income and EPS measures exclude restructuring, impairment and other charges and adjustments to prior estimates for such charges. Additionally, the company’s non-GAAP measures exclude adjustments to asbestos settlement reserves, gains and losses arising from debt retirements, charges or credits arising from adjustments to the valuation allowance against deferred tax assets, equity method charges resulting from impairments of equity method investments or restructuring, impairment or other charges taken by equity method companies and gains from discontinued operations. The company believes presenting non-GAAP net income and EPS measures is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company’s underlying performance. These non-GAAP measures are reconciled on the company’s Web site at www.corning.com/investor_relations and accompany this news release.

About Corning Incorporated

Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology.

Forward-Looking and Cautionary Statements

This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political instability or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.

CORNING INCORPORATED AND SUBSIDIARY COMPANIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE

Three Months Ended December 31, 2008

(Unaudited; amounts in millions, except per share amounts)

Corning’s earnings per share (EPS) excluding special items for the fourth quarter of 2008 is a non-GAAP financial measure within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, generally accepted accounting principles (GAAP). The company believes presenting non-GAAP EPS is helpful to analyze financial performance without the impact of unusual items that may obscure trends in the company’s underlying performance. A detailed reconciliation is provided below outlining the differences between this non-GAAP measure and the directly related GAAP measure.

	Range
Guidance: EPS excluding special items	$	0.20	$	0.28
Special items (a)
Earnings per share

This schedule will be updated as additional announcements occur.

(a) From time to time, Corning may record special items which could result in a gain or loss during the quarter.

Please note that the company may pursue other financing, restructuring and divestiture activities at any time in the future, and that the potential impact of these events is not included within Corning's fourth quarter 2008 guidance.

This schedule contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are based on current expectations and involve certain risks and uncertainties. Actual results may differ from those projected in the forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the Securities and Exchange Commission filings of this Company.