康寧 (GLW) 2014 Q3 法說會逐字稿

Ladies and gentlemen, welcome to the Corning Incorporated third quarter 2014 earnings results. It is my pleasure to turn the call over to Ann Nicholson, Division Vice President of Investor Relations.

各位女士、先生，歡迎參加康寧公司（Corning Incorporated）2014 年第三季財報結果電話會議。我很高興將電話會議交給投資人關係事業部副總裁 Ann Nicholson。

Thank you, Greg. Good morning. Welcome to Corning's third quarter conference call. With me today is Wendell Weeks, Chairman and Chief Executive Officer, and Jim Flaws, Vice Chairman and Chief Financial Officer.

謝謝你，Greg。各位早安。歡迎參加康寧第三季電話會議。今天與我一同出席的有董事長暨執行長 Wendell Weeks，以及副董事長暨財務長 Jim Flaws。

Before we begin our formal remarks, I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially. These factors are detailed in the Company's financial reports.

在我們開始正式發言之前，我想提醒各位，今天的發言包含前瞻性陳述，屬於 1995 年《私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）所界定的範圍。這些發言涉及多項風險、不確定性及其他因素，可能導致實際結果出現重大差異。相關因素已在本公司財務報告中詳述。

You should also note that this presentation contains a number of non-GAAP measures. Reconciliation can be found on our website. Now I'll turn the call over to Jim.

另外請注意，本簡報包含多項非 GAAP 衡量指標。對帳資訊可在我們的網站上查閱。現在我把電話交給 Jim。

Thanks, Ann. Good morning, everyone. I'm pleased to share the details of our third quarter performance with you this morning. Corning had an outstanding quarter with EPS up 21% versus last year. This makes two full years of year-over-year quarterly earnings growth, a significant accomplishment. It's a trend we're proud of and working to continue.

謝謝，Ann。各位早安。我很高興在今天早上與各位分享我們第三季表現的細節。康寧本季表現出色，每股盈餘（EPS）較去年成長 21%。這也代表我們已連續兩整年達成年對年（YoY）的季度獲利成長，這是一項重要的成就。我們對這個趨勢感到自豪，並將持續努力延續。

I'd like to recap our 2014 areas of focus which is been key to this success year to date. They are, number one, to continue the positive momentum in display technology; number two, to integrate Corning Precision Materials and execute on the synergy plan; number three, to grow sales and profits in our other segments; and number four, to return cash to shareholders. We continue to advance on each one of these priorities.

我想回顧我們 2014 年的重點聚焦領域，這些是今年迄今成功的關鍵。第一，延續顯示科技的正向動能；第二，整合 Corning Precision Materials 並執行協同效益計畫；第三，推動其他事業部門的營收與獲利成長；第四，回饋現金給股東。我們在每一項優先事項上都持續推進。

In display, our LCD glass volume growth was excellent and our price declines continue to moderate. TV retail sales and screen size have been stronger than our forecast, and we're increasing our view of glass demand for the year. Overall, this business has good momentum heading into quarter four and next year. Our CPM integration's going well, and we feel very good about getting $90 million or more in pretax synergies this year. In total, these first two priorities contributed about half of our quarter three year-over-year EPS improvement.

在顯示事業方面，我們的 LCD 玻璃出貨量成長表現優異，價格下滑幅度也持續趨緩。電視零售銷售與螢幕尺寸表現均優於我們的預測，因此我們上調今年玻璃需求的看法。整體而言，這項業務在邁入第四季及明年之際具備良好動能。我們的 CPM 整合進展順利，我們對今年達成 9,000 萬美元或以上的稅前協同效益感到非常有信心。合計而言，前兩項優先事項約貢獻了第三季年對年 EPS 改善的一半。

The other half of our EPS improvement came from the latter two priorities. In our other segments, we are seeing excellent growth in environmental and optical communications, actually stronger than our expectations. Specialty materials did meet the expectations we outlined in our July call, and Dow Corning had an excellent quarter. Finally, we're continuing share repurchases and expect to complete our current program in quarter four.

EPS 改善的另一半來自後兩項優先事項。在其他事業部門方面，我們看到環境科技與光纖通訊出現優異成長，實際上強於我們的預期。特殊材料符合我們在 7 月電話會議中所提出的預期，而 Dow Corning 也繳出非常出色的一季。最後，我們持續進行庫藏股買回，並預期在第四季完成目前的計畫。

Let's get into third quarter highlights. In the third quarter, we had record core sales and gross margin with optical communications and display technologies exceeding our expectations. We delivered $0.40 of earnings per share that surpassed last year by $0.07. We realized increased synergies from the integration of CPM, and we attained more moderate price declines for LCD glass.

接下來談第三季重點。第三季我們的核心營收與毛利率創下新高，其中光纖通訊與顯示科技的表現超出預期。我們每股盈餘為 0.40 美元，較去年增加 0.07 美元。我們因 CPM 整合而實現更高的協同效益，同時 LCD 玻璃的價格下滑也更為溫和。

Let's turn to the details. As a reminder, we're providing core performance results in order to exclude a nonperformance related items and increase the transparency of our operating results. Core financial measures are non-GAAP which we use in addition to GAAP. You can find the detailed reconciliations on our website outlining the differences between these non-GAAP measures and the most directly comparable GAAP measure.

接著說明細節。提醒各位，我們提供核心績效結果，是為了排除與營運表現無關的項目，並提高營運結果的透明度。核心財務衡量指標屬於非 GAAP，我們會在 GAAP 之外一併使用。您可在我們的網站上找到詳細對帳，說明這些非 GAAP 指標與最直接可比的 GAAP 指標之間的差異。

Third quarter sales were $2.6 billion, up 26% versus last year, a new record, driven largely by the consolidation of CPM sales. We have successfully expanded our gross margin percent with Q3 being up 1.5 points driven by the improved profitability in environmental, optical communications, life sciences, and display, as well as CPM integration.

第三季營收為 26 億美元，較去年成長 26%，創下新高，主要由於合併納入 CPM 的營收。我們成功擴大毛利率百分比，第三季毛利率提高 1.5 個百分點，動能來自環境科技、光纖通訊、生命科學與顯示事業獲利能力提升，以及 CPM 整合。

Gross equity earnings of $76 million were down 37% year-over-year, driven by the elimination of the equity earnings of SCP following the acquisition. Equity earnings were above our forecast driven by Dow Corning. Our effective tax rate was approximately 19% as expected.

權益法投資收益總額為 7,600 萬美元，年對年下降 37%，主要因收購後不再認列 SCP 的權益法投資收益。權益法投資收益高於我們的預測，主要由 Dow Corning 帶動。我們的有效稅率約為 19%，符合預期。

Overall, EPS was $0.40 up 21% over a year ago and $0.03 above consensus. During the quarter we bought approximately $200 million of shares in the open market. We had $183 million remaining on our current program and expect to complete it in Q4.

整體而言，EPS 為 0.40 美元，較一年前成長 21%，並較市場共識預期高出 0.03 美元。本季我們在公開市場買回約 2 億美元的股票。目前計畫尚餘 1.83 億美元，我們預期在第四季完成。

Now I'll go to the detailed segment results, and I'll begin with display. Display sales were $1.1 billion in Q3, a 62% increase versus last year driven by the additional sales from our now consolidated operations in Korea, Corning Precision Materials. Q3 sequential price declines were less than Q2 as we had expected. The LCD glass market, up single digits sequentially, exceeded our expectations for the quarter driven by better than anticipated television sales in the supply chain's preparations for retail sales for quarter four.

接下來我將說明各事業部門的詳細結果，先從顯示事業開始。第三季顯示事業營收為 11 億美元，較去年成長 62%，主要由於我們在韓國、現已合併入報表的 Corning Precision Materials 帶來的額外營收。如我們預期，第三季的季對季價格下滑幅度小於第二季。LCD 玻璃市場季對季成長為個位數，且超出我們對本季的預期，主要因供應鏈為第四季零售銷售做準備之際，電視銷售優於預期。

The supply chain had likely anticipated some cooling off of television sales after the World Cup, however, retail television unit sell-through in July and August was up in every region except Japan and Latin America. We anticipate Latin America be down given the very high set level of sales in Q2 for the World Cup.

供應鏈原本可能預期世界盃之後電視銷售會降溫；然而，7 月與 8 月的電視零售終端銷售量（sell-through）除日本與拉丁美洲外，各地區皆呈現成長。我們預期拉丁美洲會下滑，因為第二季因世界盃帶動的電視銷售基期非常高。

Japan remains sluggish but [swung] less than 5% of the market. All other regions were up, and year-to-date through August we estimate TV unit retail sell-through is up 7%. Additionally, consumers are buying larger televisions which adds to the volume of glass ships. I'll give you our revised expectations for the higher growth LCD glass market in our outlook section.

日本市場仍然疲弱，但其占整體市場比重 [swung] 不到 5%。其他所有地區皆呈現成長；截至 8 月的年初至今（YTD），我們估計電視零售終端銷售量成長 7%。此外，消費者購買更大尺寸的電視，也帶動玻璃出貨量增加。我將在展望部分提供我們對 LCD 玻璃市場較高成長的修正預期。

Supply chain inventory remained healthy exiting the quarter with forward-looking weeks of inventory down more than one week versus the end of Q2. We have always used panel prices to aid our analytics on the supply chain and display market. Panel prices have risen over Q2 and Q3. We do not believe the recent flattening of panel prices is cause for alarm because we do not see any unusual inventory buildup in the supply chain.

本季結束時供應鏈庫存仍維持健康水位，前瞻性的庫存週數較第二季末下降超過一週。我們一向使用面板價格來協助分析供應鏈與顯示市場。面板價格在第二季與第三季期間上升。我們不認為近期面板價格走平需要擔憂，因為我們未看到供應鏈出現任何異常的庫存累積。

Our volume in the third quarter was up high-single digits sequentially. Volume growth slightly outpaced market growth as we continue to recover share at one customer in Korea. Recall in Q1 volume growth was softer than the market driven mainly by a technical issue with our product with this account. We continue to expect our full-year volume growth to be in line with market growth, and our worldwide share to remain stable year-over-year.

我們第三季出貨量季對季成長達高個位數。出貨量成長略高於市場成長，因為我們持續在韓國的一家客戶處收復市占。回顧第一季，出貨量成長低於市場，主要是因為我們在該客戶的產品出現技術問題。我們仍預期全年出貨量成長將與市場成長一致，且我們的全球市占將維持年對年穩定。

Gross equity earnings from our equity venture in Korea, SCG, were immaterial. Year-over-year gross margins improved in display driven by the CPM consolidation. Net income was up 14% year-over-year reflecting the impact of additional sales, earnings, and synergies from CPM. The display organization has done an outstanding job this year with cost reduction and successfully integrating CPM.

我們在韓國的權益合資企業 SCG 所貢獻的股權收益總額並不重大。顯示事業的年對年毛利率改善，主要受 CPM 併表所帶動。淨利年對年成長 14%，反映了 CPM 帶來的額外銷售、獲利與綜效影響。顯示事業團隊今年在成本降低以及成功整合 CPM 方面表現非常出色。

In optical communications, Q3 sales were $698 million up 7% versus last year and better than we'd expected, driven by both enterprise and carrier sales in several regions. All businesses and regions contributed to the year-over-year growth with the exception of fiber sales in China. Net income was up 8% versus last year, higher than sales as higher volume and manufacturing efficiency outpaced year-over-year price declines.

在光通訊方面，第三季銷售額為 6.98 億美元，較去年成長 7%，且優於我們的預期，主要由多個地區的企業與電信營運商銷售所帶動。除中國的光纖銷售外，所有業務與地區皆對年對年成長有所貢獻。淨利較去年成長 8%，增幅高於銷售成長，因較高出貨量與製造效率的提升，超過了年對年價格下滑的影響。

In environmental, Q3 sales were $282 million up 25% versus last year. Diesel sales were up 41% with new regulations in Europe, as well as strong truck builds in North America driving additional heavy duty sales. Light duty diesel and auto sales were also up versus last year. Both the global light duty and US class A truck markets are doing very well this year.

在環境科技方面，第三季銷售額為 2.82 億美元，較去年成長 25%。受歐洲新法規以及北美卡車強勁產量帶動更多重型產品銷售影響，柴油相關銷售成長 41%。輕型柴油與汽車相關銷售亦較去年成長。今年全球輕型車與美國 A 級卡車市場表現都非常強勁。

Net income in environmental was up 78% in a record quarter. Strong volumes in auto and heavy duty diesel as well as manufacturing efficiencies continue to push up environmental's profitability.

環境科技事業在創紀錄的一季中，淨利成長 78%。汽車與重型柴油的強勁出貨量，以及製造效率提升，持續推升環境科技事業的獲利能力。

Specialty materials sales for the quarter were up 10% sequentially during by Gorilla Glass shipments for new product launches. Sales were consistent with Q3 at 2013 with price declines offsetting additional volume for Gorilla Glass. Net income in Q3 was up 18% sequentially on the higher Gorilla Glass volume, but down year-over-year by approximately 20%. The lower year-over-year sales price which had occurred in quarter one impacted the segment's profitability.

本季特殊材料銷售額較前一季成長 10%，主要受 Gorilla Glass 用於新產品上市的出貨所帶動。銷售表現與 2013 年第三季大致一致，因 Gorilla Glass 的價格下滑抵銷了額外的出貨量。第三季淨利較前一季成長 18%，來自 Gorilla Glass 較高的出貨量，但年對年約下滑 20%。第一季發生的年對年銷售價格下滑，影響了該事業部門的獲利能力。

In life sciences, sales and net income were relatively consistent year-over-year. Gross margin as a percentage of sales was up from volume and spending improvements. The low level of NIH spending has been affecting life science sales growth expectations for the year.

在生命科學方面，銷售與淨利年對年大致持平。毛利率（占銷售比重）因出貨量與支出改善而上升。NIH 支出偏低的水準，已影響今年生命科學銷售成長的預期。

Equity earnings from Dow Corning were $68 million including earnings from Hemlock. Earnings are up $40 million versus Q3 of 2013. Hemlock added $10 million in higher volume improved manufacturing.

來自 Dow Corning 的股權收益為 6,800 萬美元，其中包含 Hemlock 的獲利。相較 2013 年第三季，股權收益增加 4,000 萬美元。Hemlock 因出貨量增加與製造改善，貢獻增加 1,000 萬美元。

Silicone's business sales were up versus last year, improving equity earnings by approximately $20 million. Year-over-year equity earnings were also impacted by favorable tax expense which was partially offset by the non-repeat of a favorable one-time item in 2013. Netting the tax expense versus this one-time added $10 million to equity earnings.

矽酮（Silicone）業務銷售較去年成長，使股權收益約增加 2,000 萬美元。年對年股權收益亦受惠於較有利的所得稅費用，但部分被 2013 年一次性有利項目不再重複所抵銷。將稅費用與該一次性項目相抵後，股權收益淨增加 1,000 萬美元。

Turning the balance sheet, we ended the third quarter with $6.1 billion in cash and short-term investments. We had very strong operating cash flow in the quarter. Strong operating cash flow also resulted in strong free cash flow this quarter of more than $900 million. As a reminder, free cash flow is a non-GAAP measure. You can find a reconciliation to GAAP on our website. We ended the quarter with approximately $1.2 billion of cash in the United States.

回到資產負債表，我們在第三季末持有 61 億美元的現金與短期投資。本季營運現金流非常強勁。強勁的營運現金流也使本季自由現金流超過 9 億美元。提醒一下，自由現金流為非 GAAP 指標。您可在我們的網站上找到與 GAAP 的調節表。本季末我們在美國境內約有 12 億美元現金。

Cap spending in the quarter was $262 million. We believe our total capital spending of 2014 will be approximately $1.15 billion with both CPM and staff groups tracking to lower spending. Our preliminary capital spending forecast for 2015 is for $1.3 billion to $1.4 billion. We'll of course update you on this in January.

本季資本支出為 2.62 億美元。我們認為 2014 年全年資本支出約為 11.5 億美元，其中 CPM 與員工團體（staff groups）的支出皆低於原先追蹤水準。我們對 2015 年的初步資本支出預測為 13 億至 14 億美元。我們當然會在一月向各位更新。

Now, I'll swing to outlook, and I'll start with display. We are upgrading our expectations for the LCD retail and glass markets for the year. We expect the retail market as measured in square feet of glass to be up 10% this year, better than our prior forecast of up mid- to high-single digits because of strong television markets. Year-to-date more televisions have been sold at retail and with larger average screen sizes than our forecast.

接下來我談展望，先從顯示事業開始。我們上調今年對 LCD 零售與玻璃市場的預期。我們預期以玻璃平方英尺衡量的零售市場今年將成長 10%，優於先前預估的中到高個位數成長，主因電視市場強勁。年初至今，零售端電視銷量高於我們的預測，且平均螢幕尺寸也更大。

Our preliminary look at 2015 also calls for growth in the television market. We expect the average screen size to increase 3% through 2015 driven primarily by increased affordability. Moreover, we believe screen size growth will be robust beyond 2015 driven by Ultra high definition television penetration which favors larger sized televisions. We believe Ultra high def unit sales will double to approximately 25 million in 2015.

我們對 2015 年的初步觀察也顯示電視市場將成長。我們預期至 2015 年平均螢幕尺寸將增加 3%，主要由價格更可負擔所帶動。此外，我們認為 2015 年之後螢幕尺寸成長仍將強勁，因超高解析度電視的滲透率提升將有利於較大尺寸電視。我們認為 2015 年超高解析度電視的銷量將倍增至約 2,500 萬台。

I know some investors are concerned about television sales given the current volatility in financial markets and some less-than-great economic indicators in Europe. This chart shows the history of the television market dating back to 1970. As you can see historically there is some correlation to TV demand reacting to recessions, but not always and not to a large degree. That helps us form a more optimistic picture about next year than some of our analysts.

我知道部分投資人擔心在金融市場目前波動，以及歐洲一些不甚理想的經濟指標下，電視銷售可能受影響。這張圖顯示自 1970 年以來電視市場的歷史。如各位所見，歷史上電視需求對景氣衰退確實有一定相關性，但並非總是如此，且影響程度不大。這有助於我們對明年的展望形成比部分分析師更為樂觀的看法。

The yellow bars indicate recessions. As you can see in summary session units continue to grow, for example, plus 2% during the first Gulf War period of time. In the financial crisis units dropped 1%. We expect LCD television unit growth to be up 4% on a continuous basis through 2018. TV units have a history of growing. We expect this trend to continue, the potential for even higher growth rate given the faster replacement rate versus the CRT era.

黃色長條代表景氣衰退。總結來看，出貨量仍持續成長，例如在第一次波斯灣戰爭期間仍成長 2%。在金融危機期間，出貨量下滑 1%。我們預期 LCD 電視出貨量成長將在 2018 年前以連續基礎維持 4% 的增幅。電視出貨量過去一向有成長的歷史。我們預期此趨勢將延續，且由於相較 CRT 時代更快的汰換速度，成長率甚至可能更高。

Now next year is the year when more than half of all televisions in existence will be LCDs overtaking the CRT. In quarter four, we expect the LCD glass market to be down slightly sequentially on a normal seasonality, although the volume is up year-over-year. Corning Glass volume is expected to be flat to down slightly. We expect additional share recovery at the one account in Korea where we experienced a technical issue earlier this year. We expect LCD glass price declines in Q4 to further moderate to levels we experienced through most of 2013.

而明年將是現存電視中超過一半為 LCD 的一年，將超越 CRT。第四季我們預期 LCD 玻璃市場將因正常季節性而較前一季小幅下滑，但出貨量仍較去年同期增加。預期康寧玻璃出貨量將持平至小幅下滑。我們預期在韓國某一客戶端，先前今年較早時出現技術問題的情況下，將進一步恢復市占。我們預期第四季 LCD 玻璃價格下滑將進一步趨緩，回到我們在 2013 年大部分時間所經歷的水準。

Now moving to optical communications, we expect Q4 sales to be up mid-single digits versus Q4 2013, driven by the continued strong sales of enterprise data solutions, and fiber to the home sales in North America. We now expect full-year sales to be greater than 10% up to the growth in the fiber of the home, data centers, and wireless optical connectivity.

接著談光通訊，我們預期第四季銷售額將較 2013 年第四季成長中個位數百分比，主要由企業資料解決方案持續強勁的銷售，以及北美光纖到府（FTTH）銷售所帶動。我們目前預期全年銷售成長將超過 10%，成長動能來自光纖到府、資料中心與無線光學連接。

In environmental sales, we expect Q4 sales to be up high-single digits year-over-year driven by the continued stronger heavy duty diesel sales in the US and from new regulations in Europe. Environmental should achieve its billion dollars sales milestone this year.

在環保事業的銷售方面，我們預期第四季銷售額將較去年同期成長高個位數，主要受美國重型柴油車銷售持續走強，以及歐洲新法規帶動。環保事業今年應可達成年銷售額10億美元的里程碑。

Turning to specialty materials, we expect sales to be down in the low- to mid-teens versus the strong third quarter which was driven by demand for new product launches. Gorilla volume will be up year-over-year in Q4 as it was in Q3.

接著談特種材料，我們預期銷售額將較表現強勁、由新產品上市需求帶動的第三季下滑低至中十位數百分比。Gorilla 的出貨量在第四季將如同第三季一樣，較去年同期成長。

We're planning to launch our next-generation of Gorilla Glass on November 20. I can't spoil the launch but it does promise to have to dramatically improved performance characteristics, and our customers are already integrating this glass into the new products. Additionally, we expect our new glass to help us continue the trend of more moderate price impact we've seen the last two quarters.

我們計畫於11月20日推出下一代 Gorilla Glass。我不能提前透露發布內容，但它確實承諾將具備大幅提升的性能特性，而我們的客戶已經在將這款玻璃整合到新產品中。此外，我們預期新玻璃將有助於延續過去兩季所見、較為溫和的價格影響趨勢。

In a life sciences, we expect sales to be consistent with last year. Life sciences business has reacted to the flat market by working on its cost to maintain profitability.

在生命科學方面，我們預期銷售額將與去年持平。生命科學業務面對持平的市場，已透過成本管理來維持獲利能力。

Now continuing with the rest of our quarter four forecast, we expect quarter four equity earnings to be approximately $80 million to $90 million. This is up from Q3 driven by Dow Corning where Hemlock's solar customers are purchasing more polysilicon to meet year-end contractual obligations. We expect our core equity earnings from Dow Corning to be approximately $80 million to $85 million in Q4. This is up year-over-year with higher sales at both Hemlock and silicone's business.

接著延續我們對第四季其餘項目的展望，我們預期第四季權益法收益約為8,000萬至9,000萬美元。這較第三季增加，主要由 Dow Corning 帶動，因 Hemlock 的太陽能客戶為了履行年底合約義務而採購更多多晶矽。我們預期第四季來自 Dow Corning 的核心權益法收益約為8,000萬至8,500萬美元。由於 Hemlock 與矽酮業務的銷售均提高，該數字較去年同期成長。

For the Corporation, we expect gross margin to be about 46% driven by net positive factors in every business. Display gross margin improved versus last year in the consolidation of CPM.

就公司整體而言，我們預期毛利率約為46%，各事業皆有淨正面因素帶動。顯示事業毛利率較去年改善，原因在於 CPM 的併表。

SG&A and R&D spending should be approximately 14.5% and 8% of sales, respectively. For modeling purposes note that SG&A is up from Q3 on normal seasonality.

銷售、一般及行政費用（SG&A）與研發（R&D）支出分別約占銷售額的14.5%與8%。就建模而言請注意，SG&A 較第三季上升屬於正常季節性因素。

We expect our other income other expense line to be an income of $10 million to $20 million in Q4. This will include the final payment of an intellectual property settlement. Our effective tax rate for 2014 is expected to be approximately 19%. Projected rate is higher than 2013 driven by the addition of CPM's income which is taxed at the Korean tax rate of 24%.

我們預期第四季「其他收入／其他費用」項目將為1,000萬至2,000萬美元的收入。其中將包含一筆智慧財產權和解的最後付款。我們預期2014年的有效稅率約為19%。預估稅率高於2013年，主要因新增 CPM 的所得，其適用韓國24%的稅率。

Before I get to some additional financial items, I wanted to make a couple of comments on innovation. Several programs are advancing nicely. Beyond Gorilla Glass 4 that I mentioned earlier, Corning was recently awarded BMW's supplier innovation award for lightweight automotive Gorilla Glass, and our engagements with auto customers are accelerating. Additionally, we're making excellent progress on a major innovation project in life sciences.

在我談一些額外的財務項目之前，我想先就創新做幾點評論。多項計畫進展良好。除了我先前提到的 Gorilla Glass 4 之外，康寧近期因用於輕量化汽車的 Gorilla Glass 獲頒 BMW 供應商創新獎，我們與汽車客戶的合作也正在加速。此外，我們在生命科學的一項重大創新專案上也取得極佳進展。

Our fully diluted share count for Q3 is 1.41 billion. Our current forecast for the average fully diluted share count in Q4 is approximately 1.4 billion. Obviously depending on the stock pricing in the Q4 purchasing activity, this number may vary slightly.

我們第三季的完全稀釋後股數為14.1億股。我們目前對第四季平均完全稀釋後股數的預測約為14.0億股。顯然，視第四季回購活動時的股價而定，該數字可能會略有變動。

Now regarding the impact of yen in our earnings we have share the level of hedges we've put in place for 2015 to 2017 to offset the impact of the weakening yen. The yen has weakened significantly again during the quarter, so we're very pleased that we secured these translation hedges earlier in 2014.

關於日圓對我們盈餘的影響，我們已分享2015年至2017年為抵銷日圓走弱影響而建立的避險水位。本季日圓再度顯著走弱，因此我們非常高興能在2014年較早時就鎖定這些換算避險。

We currently report core performance at a constant yen. The rate is 93 which matches our hedge contracts which extent through 2014. As we get closer to 2015, we'll communicate our current thinking and strategy for core performance measures as they relate to constant yen reporting.

我們目前以固定日圓匯率（constant yen）來報告核心績效。匯率為93，與我們延伸至2014年的避險合約一致。隨著我們接近2015年，我們將就與固定日圓報告相關的核心績效衡量方式，溝通我們目前的想法與策略。

We've been very active on shareholder distributions over the past two years. As investors know, our current repurchase authorization will be complete this year. I'm delighted that the Board of Directors has decided to accelerate the consideration of future repurchases and dividend increases.

過去兩年我們在股東回饋方面非常積極。如投資人所知，我們目前的庫藏股回購授權將於今年完成。我很高興董事會已決定加速評估未來的回購與股利提高。

That concludes my opening remarks. Ann?

以上是我的開場說明。Ann？

Thank you, Jim. We'll now open the line for questions. Greg?

謝謝你，Jim。我們現在開放提問。Greg？

(Operator Instructions)

（接線員指示）

Rod Hall, JPMorgan.

JPMorgan 的 Rod Hall。

Good morning, guys. Thanks for taking my question. I guess the first question I had for you was regarding display demand. Jim, you give you a little bit of color in terms of regional spread on demand heading into Q4, but I wonder if you could just give us some idea of what you're thinking on demand from various regions. Like the US economy seems like it's in a pretty decent shape. Some of the UHD prices are dropping relatively quickly, but then we hear negative things coming out of Asia and Europe, etc. I just wondered if you could give us a little bit more color there.

各位早安。謝謝讓我提問。我第一個問題是關於顯示器需求。Jim，你對進入第四季前需求的區域分布提供了一些補充說明，但我想請你再談談你對各地區需求的看法。例如美國經濟看起來狀況不錯。部分 UHD 價格下滑得相對快，但我們也聽到來自亞洲與歐洲等地的負面消息。想請你再多提供一些背景。

Then I also wanted to see if you could talk to us a little bit about the Gorilla opportunity in auto again. You said you're progressing on engagement there. They're accelerating. At what point does that become material for Gorilla? Do you feel it's material now? Can you give us any idea of when it might start to impact Gorilla growth? Thank you.

另外我也想請你再談談 Gorilla 在汽車領域的機會。你提到你們在那邊的合作推進中，而且正在加速。那麼在什麼時間點它會對 Gorilla 變得具有實質性影響？你覺得現在已經具有實質性影響了嗎？你能否提供一些看法，何時可能開始影響 Gorilla 的成長？謝謝。

I'll comment briefly on the automotive, and let Wendell chime in also. Breaking into the auto industry is going to be a slow, long-term process. We are very encouraged with the rate of engagement. It actually has been increasing over the past couple of quarters. This is not going to be significant to Gorilla next year in terms of the numbers, but we're delighted by the progress and the feedback that we're getting from our car manufacturers. Wendell, anything you would like to add?

我先簡短評論一下汽車領域，之後也請 Wendell 補充。打入汽車產業將會是一個緩慢、長期的過程。我們對合作推進的速度感到非常鼓舞。事實上，過去幾季它一直在增加。就數字而言，明年它不會對 Gorilla 造成顯著影響，但我們對進展以及從車廠得到的回饋感到非常高興。Wendell，你還有什麼想補充的嗎？

No, I think that is accurate. Of the new material acceptance criteria in automotive are quite stringent. The first piece you look for is adoption amongst early adopters, who then prove it out all the way through the materials testing system which now you've seen, hence the award from BMW, the innovation award. Then what happens next is car company after car company qualifies it in a macro, and then you turn into platform by platform. So, It just takes a while in auto, but the good news is the surface area's really high too. It's worth being a little bit patient and working through the system.

沒有，我認為這樣的說法是正確的。汽車領域對新材料的採用標準相當嚴格。你首先會看到的是在早期採用者之間的導入，接著他們會在整個材料測試體系中完成驗證；你們也已經看到成果，因此我們獲得 BMW 的創新獎、供應商創新獎。接下來會發生的是，一家又一家車廠在更大範圍內完成資格認證，然後再逐一導入到各個平台。所以在汽車領域確實需要一些時間，但好消息是可用的表面面積也非常大。值得多一點耐心，並在體系內一步步推進。

Rod, talking about the regions for television, as you mentioned North America has been very strong, and we're expecting that to continue both in unit and area growth. Europe actually has been a pleasant surprise all year long, and it wasn't just the World Cup, but embedded in our expectations is it's the lowest region for us in terms of television unit growth in the last quarter of the year. I guess Japan is equally low.

Rod，談到電視的各區域表現，如你所提到的，北美一直非常強勁，我們預期無論在出貨量或面積成長上都會延續這個趨勢。歐洲其實全年都是一個令人驚喜的表現，而且不只是因為世界盃；但在我們的預期中，歐洲會是我們在今年最後一季電視出貨量成長最低的區域。我想日本同樣也偏低。

We're looking for North America, China, and Latin America to be in the strong. Latin America, we believe, rebounds in those couple of months where the television growth was much lower, actually negative, after the World Cup. That's kind of how our balance goes.

我們預期北美、中國和拉丁美洲會表現強勁。我們認為拉丁美洲會在那幾個月出現反彈，因為世界盃之後電視成長曾大幅走低，實際上轉為負成長。我們的整體平衡大致就是這樣。

Okay. Then Jim, just one more follow up which is on the yen hedges. When do you expect to come back to us with a number there for 2015? Is that an Investor Day timing for that? Or would you tell us at the Q4 report? Just when I'm thinking about coming back to the market for that?

好的。那麼 Jim，我還有一個追問，關於日圓避險。你們預計何時會回來給我們 2015 年的數字？會是在投資人日的時間點嗎？還是會在第四季報告時告訴我們？我只是想了解你們大概何時會對市場更新這件事？

We're going to come back after Q4 earnings. We won't wait for the Investor Day.

我們會在第四季財報之後再回來提供。不會等到投資人日。

Okay. Great. Thank you guys.

好的。很好。謝謝各位。

Patrick Newton, Stifel Nicolaus.

Patrick Newton，Stifel Nicolaus。

Good morning, Wendell, Jim, and Ann. Thank you for taking my questions. I guess my first one is on Gorilla Glass. Previously, you talked about volume increasing 20% year-over-year. I'm trying to understand if this prior outlook still stands because it appears that your specialty material guidance implies flat total revenue year-over-year. Then, if there is a delta, is that completely pricing driven?

早安，Wendell、Jim 和 Ann。謝謝你們回答我的問題。我第一個問題是關於 Gorilla Glass。先前你們提到出貨量年增 20%。我想了解這個先前的展望是否仍然成立，因為看起來你們的特殊材料（specialty material）指引暗示總營收年對年持平。那如果中間有落差，是否完全是由價格所驅動？

We expect to be just about right on the 20% volume growth, as we did talk about at the beginning of the year. We did have a significant step down in pricing. Remember, there are things other than Gorilla in specialty materials. There is our semiconductor stepper lens business, which has a little bit of an impact on the numbers. Fundamentally, we expect volume growth for Gorilla to be about 20%, and fortunately the big step down in prices in Q1 chewed up a large portion of that.

我們預期 20% 的出貨量成長大致會符合我們年初所談的。我們確實在價格上有一個顯著的下調。請記得，特殊材料不只有 Gorilla。我們還有半導體步進機鏡頭（stepper lens）業務，對數字也有一些影響。基本上，我們預期 Gorilla 的出貨量成長約 20%，而且幸運的是，第一季價格的大幅下調吃掉了其中很大一部分的成長效益。

Okay. Then I guess as a follow-up, just sticking with that theme, you made a comment that your next iteration of Gorilla is going to help pricing declines moderate. Should we assume that this version has been prior -- I'm sorry, thinner than prior durations, and should we see the pricing step down that you experienced in Q1 2014 as being a one-time event? Is there a possibility that we could see another material step down on pricing in 2015? Thank you.

好的。那我接著追問，同樣延續這個主題，你們提到下一代 Gorilla 將有助於讓價格下滑趨勢趨緩。我們是否應該假設這一代產品相較於先前—抱歉—厚度更薄？另外，我們是否可以把你們在 2014 年第一季經歷的那次價格下調視為一次性事件？2015 年是否有可能再看到一次實質性的價格下調？謝謝。

We're not expecting a material step down in pricing in Gorilla for 2015. Wendell, would like to comment on the thickness in the product?

我們不預期 2015 年 Gorilla 的價格會再出現實質性的下調。Wendell，你要不要就產品厚度補充一下？

GG4, when we roll it out, you'll see a very dramatic improvement in its damage resistance. Then the question will be, will our customers choose to spend that dramatic improvement on improved drop performance for the same thickness, or will they choose as they have every other time to go dramatically thinner and keep about the same drop performance? We haven't seen that being adjudicated at all of the different customers that we've engaged with yet. It's a little too early to call which direction they go. No matter what, it's a step change above GG3 and widens the gap pretty significantly versus any competitive offering.

GG4 在我們推出時，你會看到其抗損傷能力有非常顯著的提升。接下來的問題是，我們的客戶會選擇把這個顯著提升用在同樣厚度下更好的抗摔表現，還是會像以往每一次一樣，選擇大幅變薄並維持差不多的抗摔表現？我們目前在已經接觸的不同客戶之間，還沒有看到這件事有明確的定論。現在判斷他們會往哪個方向走還有點太早。不管怎樣，這都是相較 GG3 的一個躍升，並且相對任何競品都會把差距拉大得相當明顯。

Great. Thank you for taking my questions.

很好。謝謝你們回答我的問題。

Amitabh Passi, UBS.

Amitabh Passi，UBS。

Thank you. Good morning, guys. Jim, just a quick question for you on LCD, definitely see that volumes are turning ahead of expectations, but I think if I look at the last four years, your [ASP] declines have been in the mid-teens, sometimes even higher, maybe with the exception of 2013. I just wanted to get your thoughts. As we look to 2015, how should we be thinking of price declines? Should we worry about another step function down in Q1? Any sort of clarity on pricing and pricing trajectory would be very helpful.

謝謝。各位早安。Jim，我有個關於 LCD 的快速問題：確實看到出貨量回升得比預期更早，但如果我回看過去四年，你們的 [ASP] 下滑大多在十幾個百分點，有時甚至更高，可能除了 2013 年例外。我想聽聽你的看法。展望 2015 年，我們應該如何看待價格下滑？我們需要擔心第一季再出現一次階梯式下跌嗎？任何關於定價與價格走勢的釐清都會非常有幫助。

Sure, I'd be happy to address the pricing commentary. Right now, we don't see anything in the industry that would indicate that there should be a big step down in quarter one. Things are going our way with the combination of our customers' profitability, panel prices, supply/demand being in balance.

當然，我很樂意回應關於定價的評論。就目前而言，我們沒有在產業中看到任何跡象顯示第一季會出現大幅的階梯式下跌。在客戶獲利能力、面板價格，以及供需維持平衡的組合之下，情勢正朝對我們有利的方向發展。

As we've noted before, our competitions' financial results are quite poor, and we're three quarters now in the mission of price declines, getting less each quarter. We're feeling quite good about the price in quarter one and for 2015. Obviously, I can't guarantee that, but I think we see the industry structure and the trends being favorable for pricing next year. That's obviously one of our key goals, is to get price declines back and stay back at a moderate level.

如同我們先前提到的，我們競爭對手的財務表現相當差，而我們現在已經連續三個季度在「價格下滑幅度逐季變小」的軌道上。我們對第一季以及 2015 年的價格狀況感覺相當不錯。當然，我無法保證，但我認為我們看到的產業結構與趨勢對明年的定價是有利的。這顯然也是我們的關鍵目標之一：讓價格下滑回到、並維持在較溫和的水準。

Okay. Then just a quick follow-up for Wendell, on the telecom market, Wendell, we've seen a lot of announcements now around gigabit deployments in the US. I'm just curious from your perspective, are you actually seeing the flood gates open? Are you starting to see investments follow through, or is a lot of this just rhetoric at this point? We'd love to get your thoughts around the fiber to the home market.

好的。那再快速追問 Wendell，關於電信市場：Wendell，我們現在看到美國有很多關於千兆部署的公告。我想從你的角度了解，你們是否真的看到閘門打開、需求湧現？你們是否開始看到投資實際落地，還是目前多半只是口號？也很想聽聽你對 FTTH（光纖到府）市場的看法。

We're feeling it, and feeling it very positively. It's why we see our full-year revenue to be upgraded in 10% for us in optical. Fiber to the home is a big part of that. Enterprise, specifically data centers, are also part of that, as well as our wireless business.

我們確實感受到了，而且是非常正面的感受。這也是為什麼我們把光學業務的全年營收展望上調到對我們而言約 10% 的成長。光纖到府是其中很大的一部分。企業端，特別是資料中心，也是一部分，另外還包括我們的無線業務。

What we're seeing is that the dialogue has shifted from whether or not to do fiber to the home, to when are we going to end up doing fiber to the home. That piece that you're picking up, we're beginning to actually see in network planning and of course in this year, we're seeing it in orders.

我們看到對話已經從「要不要做光纖到府」轉變為「我們什麼時候要做光纖到府」。你所感受到的那一塊，我們開始在網路規劃中實際看到，當然在今年我們也在訂單上看到了。

Excellent. Thank you.

很好。謝謝。

Joseph Wolf, Barclays.

Joseph Wolf，巴克萊。

Thank you. On the TV commentary, the display side, I had a follow-up question. When you mentioned the pricing that you used and the growth, can you give us a little more insight on how you used that? Does the pricing increase that you're talking about indicate some sort of large screen flattening out for a little while? Then you mentioned a 3% growth. Did you mean 3% points as a percentage of overall display, or 3% growth in that category? Then just any further commentary on timing of UHD?

謝謝。關於電視評論、顯示器這一端，我有一個追問。當你提到你所使用的定價以及成長時，能否再多給我們一些你如何運用這些的洞見？你所談到的價格上調，是否意味著大尺寸螢幕會在一段時間內趨於平緩？然後你提到 3% 的成長。你指的是以整體顯示器為基礎的 3 個百分點，還是該類別的 3% 成長？另外，關於 UHD 的時程還有任何進一步的評論嗎？

Ultra high def, we have been generally slightly below with the industry has said, although the numbers this year are slightly beating our expectations. I'm not sure what you're referring to on the 3%. We talked about the average size increasing 3% next year which would be a little over an inch. As you know, we've actually twice this year had to raise our estimate of average size but I think that's the 3% you're referring to.

超高解析度方面，我們整體上通常略低於產業所說的水準，不過今年的數字略微優於我們的預期。我不確定你指的 3% 是什麼。我們談的是明年平均尺寸增加 3%，大約會多一點點超過一英吋。如你所知，今年我們其實已經兩次上調平均尺寸的估計，我想你指的 3% 就是這個。

Yes, that's exactly. I wasn't sure if you meant the percentage of that, or the percentage of the total.

是的，正是如此。我不確定你指的是那部分的百分比，還是總體的百分比。

No. The average size is going up by 3%.

不是。平均尺寸會上升 3%。

I think what's smart about the combined piece of your question is that what we see is the introduction of Ultra high def also tends to push up screen size as well because the experience is even better the bigger you go. It also tends to be given the brand's pricing strategies that their introductory plans tend to be on the larger TVs.

我認為你這個問題把兩件事結合在一起很到位：我們看到超高解析度的導入也往往會推升螢幕尺寸，因為螢幕越大，體驗越好。此外，基於品牌的定價策略，他們的導入計畫通常也會先從較大尺寸的電視開始。

Just an update, there was a lot of noise this quarter about the Sapphire business. As you introduce Gorilla 4, and you talked about the damage resistance, what are the key characteristics that you think your customers are looking for on the cover glass right now? What you think the market's saying right now with what happened with the Sapphire story?

再更新一下，本季市場上對藍寶石業務有很多雜音。當你推出 Gorilla 4，並談到抗損傷能力時，你認為客戶目前在保護蓋玻璃上最看重的關鍵特性是什麼？就藍寶石這件事的發展，你覺得市場現在傳達了什麼訊息？

We've talked pretty extensively about Sapphire. I think it's first important to put in context. Sapphire is not a new material. We've made a lot of Sapphire. We've made a lot of Gorilla, so we can do either. We can be in either media, and do just fine.

我們已經相當深入地談過藍寶石。我想首先重要的是把它放在脈絡中看。藍寶石不是新材料。我們生產過很多藍寶石。我們也生產過很多 Gorilla，所以兩者我們都能做。我們可以在任何一種材料上投入，也都能做得很好。

We chosen to invest more strongly in Gorilla. The reason is that even though Sapphire is a legitimate choice as a cover glass, it's not a new choice. It's been out there for a while, and there's under a single digit sort of millions of phones that use it. You have about 3 billion phones that use Gorilla, and the reason is what customers care about is more than just scratch. Sapphire's superior from a scratch standpoint, but customers also care about battery life. Gorilla glass transmits more light, so therefore it uses less battery power. They don't want their phone to break when they drop it. Sapphire tends to be more brittle, Gorilla's job performance is better.

我們選擇更大力投資 Gorilla。原因是，即使藍寶石作為蓋板玻璃是一個合理的選項，但它並不是新的選擇。它已經存在一段時間了，而採用它的手機數量只有個位數的百萬台。使用 Gorilla 的手機大約有 30 億台，原因在於客戶在意的不只是抗刮。就抗刮而言藍寶石更優，但客戶也在意電池續航。Gorilla 玻璃透光率更高，因此耗電更少。他們也不希望手機摔落時就破裂。藍寶石往往更脆，Gorilla 的抗摔表現更好。

People care about value, and Gorilla is about one-tenth the cost of Sapphire. People care about how heavy it is, and Gorilla Glass is about 40% lighter than Sapphire. Some people care about how green the product is, and Sapphire uses about 100 times more energy than glass to produce. As we put that whole balance together we would rather invest the bulk of our innovation portfolio in covers into continuing to improve Gorilla Glass. We just think it's a better technical bet, even though Sapphire remains a valid choice and a material that we'll continue to watch closely and continued to make decisions about.

人們在意性價比，而 Gorilla 的成本大約只有藍寶石的十分之一。人們在意重量，而 Gorilla Glass 大約比藍寶石輕 40%。有些人關心產品有多環保，而生產藍寶石所需的能耗大約是玻璃的 100 倍。綜合這些權衡，我們寧可把創新組合中大部分的蓋板投資，放在持續改進 Gorilla Glass 上。我們認為這是更好的技術押注，儘管藍寶石仍是有效的選擇，也是我們會持續密切關注並持續做出決策的材料。

Great. Thank you.

很好。謝謝。

Ehud Gelblum, Citigroup.

Ehud Gelblum，花旗集團。

Hello. Good morning, guys. I appreciate it. Thank you. A couple questions on Gorilla, a couple questions on glass as usual, Gorilla, 20% volume growth this year, Jim. What are you expecting next year, and are the drivers of that? We've seen tablet growth level out. A couple of your large customers come light on tablets the last couple of quarters. Setting aside automotive, should we be looking at 20% growth again next year in volume? If so, what the drivers there?

你好。各位早安。感謝。謝謝。照例有幾個關於 Gorilla 的問題、也有幾個關於玻璃的問題。Jim，今年 Gorilla 出貨量成長 20%。你們預期明年會如何？驅動因素是什麼？我們看到平板成長趨於持平。你們幾個大客戶在過去幾季的平板表現偏弱。先不談車用，明年出貨量還會再看 20% 成長嗎？如果是，驅動因素會是什麼？

Then pricing, I know we've never had a normal year for pricing for Gorilla. Clearly, you've said that pricing took a step down in Q1 of this year, but assuming it doesn't next year, what does normal pricing? We know what moderate to normal pricing looks like for LCD. We don't know what it means for Gorilla. If this year it was 20% volume growth, 20% pricing declines, should we be looking at normal pricing down 10% or so in Gorilla?

再談定價，我知道 Gorilla 的定價從來沒有過所謂「正常」的一年。很明顯，你們說今年第一季定價下了一個台階，但假設明年不再發生這種情況，所謂正常的定價會是什麼樣子？我們知道 LCD 的溫和到正常定價大概長什麼樣。但我們不知道 Gorilla 的意思是什麼。如果今年是出貨量成長 20%、價格下滑 20%，那麼 Gorilla 的正常定價是否應該看大約下滑 10% 左右？

If we look at glass for LCD, 10% growth this year in unit volume 2014, nice strong number, what should we be looking -- I hear you on the screen size -- but are you thinking the same 10% for 2015, the main thing there? I just wanted to confirm on pricing. You said it was moderating again. So, I'm assuming around 4% or so. I just wanted to quantify that 4% was the right decline for pricing for Q3. Why wouldn't it have come straight back to 2% of 3%? What are the minor deltas out there that are still keeping it, in Q3 at lease, not to the same levels as 2013? Thank you.

如果看 LCD 用玻璃，2014 年單位出貨量成長 10%，是個很不錯、很強的數字；那 2015 年我們應該看什麼——我聽到你提到螢幕尺寸——但你是否也在想 2015 年同樣是 10% 左右，主要就是這個？我也想確認一下定價。你說它又在趨於溫和。所以我假設大約是 4% 左右。我想量化確認一下：第三季的定價下滑 4% 是否是正確的數字？為什麼它沒有直接回到 2% 或 3%？有哪些小的差異因素，仍讓它在第三季至少還沒回到 2013 年的同樣水準？謝謝。

You get the record for getting 10 questions in one minute. (laughter)

你創下了一分鐘問 10 個問題的紀錄。（笑聲）

I talk quickly.

我講話很快。

We haven't given official guidance yet on volume for Gorilla next year. We do expect Gorilla volume to grow, but not giving an official number of next year. Obviously we think phones will be up, and the key question for us is the growth in tablets. We want to see how well tablets finish up this year. Then we'll give you a volume estimate when we get to our quarter four call.

我們尚未對明年 Gorilla 的出貨量提供正式指引。我們確實預期 Gorilla 出貨量會成長，但目前不提供明年的正式數字。很明顯我們認為手機會成長，而對我們來說的關鍵問題是平板的成長。我們想先看看今年平板的收尾表現如何。等到第四季法說時，我們會給你們出貨量的估計。

On pricing, I think there's no way at this point in time to tell you what normality is in Gorilla. We do expect price declines every year. We expect excellent cost reduction. It's still a very new product, and we're continuing to make progress there. What I have said is we're not expecting a repeat of the major down we had in Q1 of 2014.

關於定價，我認為在目前這個時間點，沒有辦法告訴你 Gorilla 的「正常」水準是什麼。我們確實預期每年都會有價格下滑。我們預期會有很出色的成本降低。這仍然是一個非常新的產品，我們也持續在這方面取得進展。我之前說過的是，我們不預期會重演 2014 年第一季那次大幅下跌。

Turning to glass, we haven't given our official estimate for next year. I don't know if we'll get quite to the 10% growth, although we continue to be surprised by television, both in units and size. We are looking for a glass market to be up significantly again. Certainly upper-single digits is very possible. Whether it gets to 10% or not, I can't tell at this stage.

轉到玻璃業務，我們尚未給出明年官方的預估。我不確定是否能達到 10% 的成長，儘管我們仍持續對電視市場感到驚喜，無論是出貨量還是尺寸。我們預期玻璃市場將再次顯著成長。當然，高個位數的成長非常有可能。至於是否能到 10%，我在這個階段還無法判斷。

Price declines were under 4%, and to answer you question, what gets it back to 2%? We haven't seen 2%, absolute 2%, for quite a while. We think the trends in the industry are continuing to drive us to keep going down on the amount of this quarterly sequential price declines. That's, again, a combination of things I mentioned earlier with the overall health of the supply chain, health of our customers, our competitors weak in financials. We believe we'll continue to edge down a little bit every quarter. Obviously, we'd be delighted as I'm sure you would if it suddenly went to 2.0%. Okay.

價格下滑幅度低於 4%；回答你的問題，什麼因素能讓它回到 2%？我們已經有一段時間沒有看到 2%，絕對的 2%。我們認為產業趨勢持續推動我們，讓每季的季比價格下滑幅度繼續下降。這同樣是我先前提到的多項因素的組合，包括供應鏈整體健康狀況、客戶的健康狀況，以及競爭對手財務面較弱。我們相信每一季仍會再小幅下滑一些。顯然，如果它突然降到 2.0%，我們會很高興，我相信你也會。好的。

I appreciate it. If I can ask one more thing on core earnings, I was under the impression that you would've made your decision on what to do with core earnings this quarter. What gave you pause? Obviously, it has weakened again to 108. Why didn't you just go to [99] right now? What are you waiting for?

感謝。如果我可以再問一個關於核心盈餘的問題，我原本以為你們這一季就會做出核心盈餘要怎麼處理的決定。是什麼讓你們猶豫了？顯然它又走弱到 108。為什麼你們不現在就直接改到 [99]？你們在等什麼？

We're very focused on finishing up the year, and emphasizing the 93 that we have this year. We've been very transparent about our hedges. The yen has a lot of volatility in this most recent three months, and so we decided it made more sense to just finish out the year with the 93, emphasizing that and then make a final decision as we enter next year.

我們非常專注於把今年收尾，並強調今年採用的 93。我們對避險部位一直非常透明。日圓在最近這三個月波動很大，因此我們決定，把今年用 93 把它走完、強調這一點會更合理，然後在進入明年時再做最後決定。

Thanks, Jim. Thanks, Wendell.

謝謝你，Jim。謝謝你，Wendell。

(Operator Instructions)

(接線員指示)

Simona Jankowski, Goldman Sachs.

Simona Jankowski，高盛。

Hi, thank you. I wanted to ask you first a follow-up on Gorilla. Can you just explain again why you expect it to decline in the fourth quarter? That's typically seasonally strong, and you have some customers ramping new products. Is that an inventory effect? What do you see there driving that decline?

嗨，謝謝。我想先追問一個關於 Gorilla 的問題。你能再解釋一次為什麼你預期第四季會下滑嗎？那通常是季節性強勁的季度，而且你們有一些客戶正在拉升新產品。那是庫存效應嗎？你看到是什麼在驅動那個下滑？

Actually, it's the opposite. Quarter four volumes, with the exception of 2012, when most of that ended up in inventory, actually do go down. I don't think we're at a point of calling it; we have enough history to say is a seasonality thing. The volumes in Gorilla tend to be driven by product launches. Customers build for that. We believe that down in quarter four is because of a large launch and large amounts that we ship. That has happened in many quarter fours. That's why people tend to think about as normal seasonality, but it really relates to the impact of model launches and how fast people build them. Sometimes they happen, the launches, on a more spread out period of time. This was a very concentrated one in the back part of quarter three.

其實正好相反。第四季的出貨量，除了 2012 年（當時大多數最後進了庫存）之外，實際上是會下降的。我不認為我們已經到了可以下定論的程度；我們還沒有足夠的歷史資料可以說那就是季節性。Gorilla 的出貨量往往是由產品上市（launch）所驅動。客戶會為此備貨。我們認為第四季下滑，是因為有一次大型上市，以及我們出貨了大量產品。這在很多個第四季都發生過。這也是為什麼大家傾向把它當作正常季節性，但其實更關係到機型上市的影響，以及客戶拉貨建置的速度。有時候上市會分散在較長的一段時間。這次則是非常集中在第三季後段。

Okay. Then when you talked about not expecting a repeat of the big price down for Gorilla next year is what you saw at the beginning of this year, can you just expand a little bit on what gives you that confidence? Putting it all together, is it reasonable to expect that Gorilla revenues can grow next year?

了解。那你提到明年不預期 Gorilla 會重演今年年初那種大幅降價，你能再多談一點是什麼讓你有這樣的信心嗎？綜合來看，合理的預期是 Gorilla 明年營收可以成長嗎？

I won't comment anymore on the pricing. You'll have to wait until the November 20 launch date of Gorilla 4, but I will say that I think it is reasonable that we have growth in specialty materials revenue, netting that volume growth and the price.

我不會再多評論定價。你得等到 11 月 20 日 Gorilla 4 的發表日期；但我會說，我認為專業材料（specialty materials）營收在扣抵（netting）了量的成長與價格因素後，出現成長是合理的。

Okay. Just last one on FX, I'm recognizing you won't give us the precise guidance until next quarter, but I think it was commented in the past about roughly 5% headwinds from the FX change, in terms of your hedge, as we think about your earnings for next year. Is that still the right way to think about it?

好的。最後一個關於匯率的問題，我知道你們要到下季才會給精確指引，但過去曾提到，從避險的角度來看，匯率變動對明年盈餘大約有 5% 的逆風。這樣的理解仍然正確嗎？

Yes. In the absence of the yen suddenly going back into the lower 90s, we are pretty confident that our core rate will be moving up from 93. This has been known by investors in the market for quite a period of time. With the yen currently at 108, we feel very good about the hedges we put in place.

是的。除非日圓突然回到 90 出頭的較低區間，我們相當有信心我們的核心匯率會從 93 往上移動。市場上的投資人對此已經知道一段時間了。以目前日圓在 108 的水準來看，我們對已建立的避險部位感到非常滿意。

Great. Thank you very much.

很好。非常謝謝。

Steven Fox, Cross Research.

Steven Fox，Cross Research。

Thanks. Good morning, guys. First of all, just on the upgrade to the retail glass demand, the 10%, I'm just curious how much of that is backward-looking? In other words, it's just that Q3 came in better than expected. How much of that is just intentions to buy in your model for the holiday season?

謝謝。各位早安。首先，關於你們把零售端玻璃需求上調到 10%，我想知道其中有多少是回溯性的？換句話說，只是因為第三季表現優於預期。又有多少是你們模型中，針對假期旺季的購買意向？

Then secondly, I was just curious around gross margins. It seems like it came in a little bit weaker than the 46% peg for the quarter, but you're still targeting 46% for this quarter. Can you walk through some of the puts and takes from that, Q3 and Q4?

第二，我也想問一下毛利率。看起來本季結果比你們對該季 46% 的設定值略弱一些，但你們仍以本季 46% 為目標。你能帶我們走一遍第三季與第四季之間的主要正負因素（puts and takes）嗎？

On the gross margin, I don't think we came in weaker than our own expectations, maybe weaker than what some analysts expected. On the 10%, it's a combination of the robust demand we saw in retail and the World Cup didn't seem to have a pull forward, then a significant drop-off. Second, it is related to the average size. I think we told you in our July call that we moved our average size up. Generally, we do this only twice a year, and actually we raised our average size again. That's based on historical experience that we've seen at retail in quarter three.

關於毛利率，我不認為我們的結果低於我們自己的預期，可能是低於部分分析師的預期。至於 10%，它是我們在零售端看到的強勁需求，以及世界盃似乎沒有造成提前拉貨後又明顯下滑的綜合結果。第二，它也與平均尺寸有關。我想我們在 7 月的電話會議中告訴過你，我們把平均尺寸上調了。一般而言，我們一年只會做兩次，而我們其實又再把平均尺寸提高了一次。這是基於我們在第三季零售端看到的歷史經驗。

We think looking forward, we haven't seen all the pricing for the holiday season yet, but it looks like the price on large televisions is going to be excellent for consumers, and that plays into how we move the average size up. In size, it's both historical as well as forward-looking based on price.

我們認為展望未來，我們還沒有看到假期季所有的定價，但看起來大尺寸電視的價格對消費者會非常有吸引力，而這也有助於我們推動平均尺寸提升。在尺寸方面，這既是基於歷史，也是在價格基礎上的前瞻判斷。

Great. Then maybe I'll just reword my gross margin question. It came in a little bit lower than I was thinking. Maybe quarter-over-quarter, getting back to 46%. I know you mentioned broadly speaking that all businesses, you'd see better margins, but can you walk through where the more dramatic improvements in margins, or anything we should keep in mind about gross margins specifically for Q4? Thanks.

很好。那我可能把我的毛利率問題換個說法。實際結果比我想的略低一些。也許按季比較，回到46%。我知道你提到大體而言所有業務的毛利率都會更好，但你能否說明一下，哪些地方的毛利率改善更明顯，或是我們在Q4的毛利率（特別是總毛利率）方面需要注意什麼？謝謝。

I think one thing is that we expect our price declines in display in Q4 to be less than they were in Q3. The second thing is synergies from the CPM deal continue to accelerate. Those two things will help display. Then we're seeing excellent manufacturing performance in environmental, which coupled with the volume that we're seeing there, it helps us quite a bit. Wendell, anything you'd like to add to gross margin?

我想其中一點是，我們預期Q4顯示業務的價格下滑會小於Q3。第二點是，來自CPM交易的協同效益持續加速顯現。這兩點都會有利於顯示業務。另外，我們看到環境事業的製造表現非常出色，再加上那邊的出貨量表現，對我們幫助很大。Wendell，你還有什麼想補充的毛利率看法嗎？

I think as we just step back and take a look at the quarter we just went through, you see a lot of what our road map has been, and what we hope it continues to be which is you're seeing revenue up. You're seeing margin percent up. Year-over-year, you're seeing very balanced growth with display providing a significant (technical difficulty) as well as [optical] and environmental and our other businesses.

我想如果我們退一步回顧剛過去的這一季，你會看到很多我們路線圖所描繪的內容，以及我們希望它能持續的方向：你看到營收上升。你看到毛利率百分比上升。以年對年來看，你看到相當均衡的成長，顯示業務提供了顯著的（技術困難）以及[光學]、環境事業和我們其他業務的成長。

Then we've got a whole great set of new products that are going to be rolling out here over the coming quarter. One Wireless is doing great. We just put it in Texas Aggie Stadium. That's going terrific. Gorilla Glass 4, you heard Jim talk about. Gas particular filters. In environmental, we're going to have a new high-performance display glass in the coming quarter. And then really a new life science product that we believe we should be rolling out over the coming three to four quarters that has a dramatic ability to create a big business for us. Then cash flow is really strong, and our balance sheet's a powerhouse. If we can continue to follow this road map through the coming quarters, I think we're going to feel pretty good, Steve.

接下來在未來一季，我們還會推出一整套很棒的新產品。One Wireless 表現非常好。我們剛把它裝進德州農工大學體育場（Texas Aggie Stadium）。進展非常順利。你也聽到Jim談到Gorilla Glass 4。還有特定的氣體微粒濾材。在環境事業方面，我們將在下一季推出新的高性能顯示玻璃。此外，我們相信在接下來三到四季會推出一款全新的生命科學產品，它具備顯著能力，能為我們創造一個很大的業務。同時現金流非常強勁，我們的資產負債表也非常有實力。如果我們能在接下來幾季持續沿著這張路線圖前進，我想我們會感覺相當不錯，Steve。

Great. That's all very helpful. Thanks very much.

很好。這些都非常有幫助。非常感謝。

Brian White, Cantor Fitzgerald.

Brian White，Cantor Fitzgerald。

Jim, I'm wondering when we think about Gorilla Glass volumes, you gave us specialty material sales, but Gorilla Glass volume, what kind of change do we see sequentially in the December quarter? Also, what are you seeing currently in the tablet market for Gorilla?

Jim，我想問一下，談到Gorilla Glass的出貨量，你給了我們特種材料的銷售額，但就Gorilla Glass的出貨量而言，在12月季度按季會有什麼樣的變化？另外，你目前在平板市場看到Gorilla的情況如何？

Gorilla Glass volume will dip down, and that's the primary reason why we're talking about specialty material sales going down sequentially. Gorilla Glass volume was up sequentially in Q3 versus Q2 which drove special materials up. Relative to the tablet market, we are shipping glass for new product launches. The key question in our mind is how well do they do at retail. Obviously, we're like everybody else, and since we're not selling to the consumers directly, we rely on both our customers in try to get retail data, but I can tell you that we are shipping increased amounts of tablet glass.

Gorilla Glass的出貨量會下滑，這也是我們說特種材料銷售額按季下降的主要原因。Gorilla Glass在Q3相較Q2按季是增加的，帶動特種材料上升。至於平板市場，我們正在為新產品上市出貨玻璃。我們心中的關鍵問題是它們在零售端賣得如何。顯然，我們跟其他人一樣，因為我們不是直接賣給消費者，所以我們仰賴客戶並嘗試取得零售數據；但我可以告訴你，我們正在出貨更多的平板玻璃。

I can see how different people get to different numbers in their Gorilla models. The reason is, is that Gorilla, our share is quite high, especially among branded. You have a pretty complicated supply chain. It doesn't take much of a change one way or the other to impact that sequential number. The key things to take away from Gorilla are that we're going to be up year-over-year. Sequential is a little bit harder to call.

我可以理解為什麼不同的人在他們的Gorilla模型裡會得出不同的數字。原因在於Gorilla的市占率相當高，尤其是在品牌機種上。供應鏈相當複雜。只要任何一個環節有一點點變動，就會影響按季的數字。關於Gorilla要帶走的重點是，我們年對年會成長。按季則比較難判斷。

We think it will be down some sequentially primarily because the highest R squared we've seen has been around major new product launches. We don't see any major nuance happening in quarter four, some small ones, but not some major new ones. That's really what's behind our guidance, if that makes any sense.

我們認為按季會下滑一些，主要是因為我們看到最高的R平方通常出現在重大新產品上市期間。我們在第四季沒有看到任何重大的新動向，會有一些小的，但沒有特別重大的新案子。這就是我們指引背後的原因，如果這樣說得通的話。

Okay, so volumes will fall maybe somewhere in single digits. Obviously, you gave us the sales guidance for the specialty materials. Is that reasonable?

好的，所以出貨量可能會下滑到個位數百分比的幅度。顯然你已經給了我們特種材料的銷售指引。這樣的推估合理嗎？

I think that the volume drop-off is reasonably consistent with the special materials sales number in terms of percent.

我認為出貨量的下滑幅度，在百分比上與特種材料銷售額的數字大致一致。

Okay. Then we think about the margin profile of Gorilla Glass, do feel like margins this year will expand versus 2013? Is this a margin expansion story in Gorilla, or have we hit a wall, and we're backtracking?

好的。那再談到Gorilla Glass的毛利結構，你覺得今年的毛利率會比2013年擴張嗎？Gorilla的故事是毛利率擴張，還是我們已經碰到天花板、開始回頭了？

I don't think we've hit a wall. I think where we're at is, it's Gorilla Glass margins are better than the corporate average. We've got a nice corporate average, as you note, so it already starts out good.

我不認為我們碰到天花板。我認為目前的狀況是，Gorilla Glass的毛利率高於公司平均。如你所說，我們公司的平均毛利率也不錯，所以起點就已經很好。

I think where we need to see as we go forward will be just that interaction between the pricing and how does our cost structure look on GG 4, and then how well we do on utilization, so I don't think we've hit a wall. I think we have ability to improve, but we still need to get a few more pieces of the puzzle in place to be able to give a definitive answer to you.

我認為接下來我們需要觀察的是定價之間的互動、以及在GG 4上的成本結構會是什麼樣子，還有我們在產能利用率上的表現；所以我不認為我們碰到天花板。我認為我們有改善的能力，但我們仍需要把拼圖的幾個部分再補齊，才能給你一個明確的答案。

Great. Thanks.

很好。謝謝。

Operator, we can take time for one more call.

接線員，我們可以再接最後一通電話。

Wamsi Mohan, Bank of America.

Wamsi Mohan，美國銀行（Bank of America）。

Yes. Thank you. Jim, I was wondering if you could talk a little bit about how China Golden Week sales progressed relative to perhaps your expectations? What do you think of the level of inventory of TVs across various regions? Maybe you want to quantify it in terms of the glass inventory across the entire supply chain that you've done historically with the range of 14 to 20 weeks? I will follow-up.

是的。謝謝。Jim，我想請你談談中國黃金週的銷售表現相對於你們的預期如何？你怎麼看各地區電視的庫存水位？也許你可以用你們過去常用的方式量化，也就是以整個供應鏈的玻璃庫存來看，是否仍在14到20週的區間？我再追問。

The holiday sales were just a hair weaker than our expectations. We often have slightly lower expectations than the industry. Two things that we were happy about is, one, it looks to us like the size of television sold during that were higher than we expected. Very importantly, in fact, when we were talking to our leader of the display business yesterday. And they've completed their inventory checks post the holiday period time, and feel that the inventory in China in televisions is in very good shape. Just a slight unit miss versus our expectations, but size, better, and inventories look okay.

假期銷售比我們的預期略弱一點點。我們的預期通常會比產業稍微保守一些。有兩件事讓我們感到滿意：第一，看起來假期期間售出的電視尺寸比我們預期更大。而且非常重要的是，事實上我們昨天在和顯示事業的負責人討論時，他們在假期後已完成庫存盤點，並認為中國電視的庫存狀況非常健康。出貨台數相較我們預期略有落差，但尺寸更好，庫存看起來也沒問題。

Okay. Could you quantify the level of glass inventory in weeks?

好的。你能以「週數」量化玻璃庫存水位嗎？

In China, I cannot. I do not have that level of detail, Wamsi.

在中國，我沒辦法。我沒有那麼細的資料，Wamsi。

Sorry. Overall, Jim?

抱歉。整體而言呢，Jim？

Overall, we fell into the 16s for this quarter we've just closed. Now remember that's a forward-looking statement, and it always drives off. Quarter four is a big retail quarter. Even though absolute inventories in supply chain went up, the weeks drop because of the look of the big pull-through of the holidays. Our own estimate is we will finish quarter four with weeks in inventory just edging into the 17 level which we think is very good for the supply chain and doesn't signal any kind of problems.

整體來看，我們在剛結束的這一季降到 16 週左右。請記得那是前瞻性陳述，而且數字總是會隨情況變動。第四季是零售的大季。即使供應鏈的絕對庫存上升，因為假期帶來的大量拉貨，換算成週數反而下降。我們自己的估計是，第四季結束時庫存週數會剛好進到 17 週左右，我們認為這對供應鏈來說非常好，也不代表有任何問題。

Okay, great. If I could ask one more, Jim, you said auto for Gorilla won't be material in 2015, but clearly you seem to be very excited about the long-term opportunity. Your CapEx guidance for 2015 does not look like it includes any new tanks, so when do anticipate to invest for new tanks to support much higher growth in Gorilla? Conceptually, how should we think about the margin profile for auto related Gorilla Glass? Do you think that would be very different from the current margin profile of Gorilla? Thank you.

好的，很棒。我再問一個，Jim，你說 Gorilla 的車用在 2015 年不會是重大貢獻，但顯然你對長期機會非常興奮。你們 2015 年的資本支出指引看起來沒有包含任何新熔爐（tanks），那麼你們預計何時會投資新熔爐以支援 Gorilla 更高的成長？概念上，我們應該如何看待車用相關 Gorilla Glass 的毛利結構？你認為那會和目前 Gorilla 的毛利結構有很大不同嗎？謝謝。

We're not planning to build any tanks for Gorilla for auto for a period of time. Remember, one of the great benefits to the CPM acquisition is that we've got idle tanks. As our one of our large customers in Korea continues to move continues to move to thin, we're going to generate more capacity.

我們在一段時間內不打算為車用 Gorilla 興建任何熔爐。請記得，CPM 併購的一大好處是我們有閒置的熔爐產能。隨著我們在韓國的一家大型客戶持續轉向更薄的產品，我們會釋出更多產能。

The margin profile will be different on this because it will have extensive finishing. We haven't decide how that finishing will be done, whether we do it or it's done in conjunction with a partner. You shouldn't be looking at the gross margins to be the same on Gorilla and auto, as what you have in consumer electronics. Nevertheless, we expect it to be a profitable product, and we're not having put assets [in front of the mill].

這部分的毛利結構會不同，因為需要大量的後段精加工。我們尚未決定這些精加工要怎麼做，是由我們自己做，或是與合作夥伴共同完成。你不應該期待 Gorilla 與車用的毛利率會和消費性電子的情況一樣。不過，我們預期這會是獲利的產品，而且我們不需要（提前）投入資產[在前段產能上]。

I think the right way to think -- I'll just echo one of Jim's comments -- the right way to think about Gorilla for us is that we are going to create the capacity through productivity to be able to service these markets, both the ability to decrease thinness, to continue to improve that, and display as well as improve it in Gorilla. The risk profile we're looking for is to take market development risk, without taking capital risk because we're creating that capacity basically for free. That's the profile that we're looking for, and those are the shots on goal that we're looking for, if that makes sense to you.

我認為正確的思考方式——我只是呼應 Jim 的一個評論——對我們而言，Gorilla 的正確看法是：我們會透過生產力提升來創造產能，以服務這些市場；包括能夠把厚度做得更薄、持續改善，同時在顯示玻璃以及 Gorilla 上都持續提升。我們要的風險組合是承擔市場開發風險，但不承擔資本風險，因為我們基本上是「免費」創造出那個產能。這就是我們在尋找的風險輪廓，也是我們想要爭取的機會（shots on goal），如果這樣說你能理解的話。

Yes, thank you, Wendell.

是的，謝謝你，Wendell。

Okay. This wraps up our call out. Just a couple of closing comments, we have a few IR announcements. First of all, we will be appearing at the UBS conference on November 18, and then at the Barclays conference on December 9. Both of those are in the San Francisco area.

好的。我們的電話會議到這裡告一段落。最後補充幾點，我們有幾項投資人關係（IR）公告。首先，我們將於 11 月 18 日出席 UBS 研討會，接著於 12 月 9 日出席 Barclays 研討會。這兩場都在舊金山灣區。

I'd like to summarize the highlights of the call. We've achieved eight consecutive quarters of year-over-year EPS growth with nearly half of Q3's improvement delivered by the non-display segments. Display has positive momentum. LCD glass price declines are moderating. The retail market's growing, and there are good signs of a healthy industry.

我想總結本次電話會議的重點。我們已連續八個季度達成年增 EPS 成長，其中第三季改善幅度近一半來自非顯示事業部。顯示事業動能轉正。LCD 玻璃價格下跌正在趨緩。零售市場在成長，且有良好跡象顯示產業健康。

We think the integration of CPM is going very well. We look forward to achieving $90 million or more in synergies this year. Very importantly for us, both optical communications and environmental are having strong sales here, and it will improve profitability. We think we're on track to deliver sales and earnings growth through the fourth quarter. Finally, as I said in my prepared remarks and the press release, the Board will be accelerating their look on shareholder distributions in the fourth quarter. Ann?

我們認為 CPM 的整合進展非常順利。我們期待今年可實現 9,000 萬美元或以上的綜效。對我們而言非常重要的是，光通訊與環境事業在此都有強勁銷售，並將提升獲利能力。我們認為我們正按計畫在第四季交付營收與獲利成長。最後，如同我在事先準備的講稿與新聞稿中所說，董事會將在第四季加速檢視股東回饋（分配）方案。Ann？

Thank you, Jim, and thank you all for joining us today. A playback of the call is available beginning at 11AM Eastern today and will run until 5PM Eastern on Tuesday, November 11. To listen, dial 800-475-6701. The access code is 338301. The audio cast of course is available on our website during that time. Greg, that concludes our call. Please disconnect all lines.

謝謝你，Jim，也謝謝各位今天加入我們。本次電話會議的重播將於今日美東時間上午 11 點開始提供，並持續到 11 月 11 日（週二）美東時間下午 5 點。收聽請撥 800-475-6701。存取碼為 338301。當然，在此期間也可於我們網站收聽網路音訊直播回放。Greg，我們的電話會議到此結束。請斷開所有線路。

Thank you, ladies and gentlemen. That does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.

謝謝各位女士、先生。今天的電話會議到此結束。感謝各位的參與，並使用 AT&T Executive Teleconference。您現在可以掛線。