康寧 (GLW) 2024 Q1 法說會逐字稿

Welcome to the Corning Incorporated Quarter 1 2024 Earnings Call.

歡迎參加康寧公司 2024 年第一季財報電話會議。

(Operator Instructions)

（操作員說明）

It is my pleasure to introduce to you, Ann Nicholson, Vice President of Investor Relations.

我很高興向您介紹投資者關係副總裁安·尼科爾森 (Ann Nicholson)。

Thank you, and good morning, everyone. Welcome to Corning's First Quarter 2024 Earnings Call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; and Ed Schlesinger, Executive Vice President and Chief Financial Officer. 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 statements involve risks, uncertainties and other factors that could cause actual results to differ materially.

謝謝大家，大家早安。歡迎參加康寧 2024 年第一季財報電話會議。今天與我在一起的有董事長兼執行長 Wendell Weeks；執行副總裁兼財務長 Ed Schlesinger。我想提醒您，今天的言論包含符合 1995 年《私人證券訴訟改革法案》含義的前瞻性陳述。

These factors are detailed in the company's financial reports. You should also note that we'll be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business. For the first quarter, the difference between GAAP and core EPS primarily reflected constant currency adjustments, translated earnings contract gains and translation gains on Japanese yen-denominated debt. As a reminder, the mark-to-market accounting has no impact on our cash flow. A reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at corning.com.

這些因素在公司的財務報告中有詳細說明。您還應該注意，除非我們特別指出與 GAAP 數據相關的評論，否則我們將使用核心績效指標來討論我們的綜合結果。我們的核心績效衡量標準是管理階層用來分析業務的非公認會計原則衡量標準。第一季度，公認會計準則與核心每股收益之間的差異主要反映了持續的貨幣調整、折算收益合約收益以及以日圓計價的債務的折算收益。提醒一下，以市值計價的會計對我們的現金流量沒有影響。您可以在我們網站 corning.com 的投資者關係部分找到核心績效與可比較 GAAP 值的調節表。

You may also access core results on our website with downloadable financials in the Interactive Analyst Center. Supporting slides are being shown live on our webcast. We encourage you to follow along, and they're also available on our website for downloading. And now I'll turn the call over to Wendell.

您也可以在我們的網站上存取核心結果，並在互動式分析師中心下載財務資料。支援幻燈片正在我們的網路廣播中直播。我們鼓勵您繼續操作，它們也可以在我們的網站上下載。現在我將把電話轉給溫德爾。

Thank you, Ann. Good morning, everyone. Today, we announced first quarter 2024 results. Sales were nearly $3.3 billion and EPS was $0.38. Year-over-year, gross margin grew 160 basis points to 36.8%, and free cash flow improved by $300 million. These results were at the high end of our guidance. More importantly, but we're seeing encouraging signs of improving market conditions. We continue to expect that the first quarter will be the low quarter for the year.

謝謝你，安。大家，早安。今天，我們公佈了 2024 年第一季業績。銷售額近 33 億美元，每股收益 0.38 美元。毛利率年增 160 個基點，達到 36.8%，自由現金流增加 3 億美元。這些結果處於我們指導的高端。更重要的是，我們看到市場狀況改善的令人鼓舞的跡象。我們繼續預計第一季將是今年的最低季。

We are executing our plans to add more than $3 billion in annualized sales within the next 3 years. And we already have the required capacity and capabilities in place. As a result, we're poised to deliver powerful incremental profit and cash flow and generate substantial shareholder value. Last quarter, we outlined a framework under which we expect to drive stronger returns on our existing innovation and capacity investments and we shared our expectation that these returns will begin in 2024.

我們正在執行未來 3 年內年銷售額增加超過 30 億美元的計畫。我們已經具備了所需的能力和能力。因此，我們準備提供強勁的增量利潤和現金流，並創造可觀的股東價值。上季度，我們概述了一個框架，預計在該框架下我們現有的創新和產能投資將獲得更強勁的回報，我們預計這些回報將於 2024 年開始。

The framework has 3 primary components: First, we believe that the first quarter will be the lowest quarter for the year. We will improve from here. Second, we expect to grow by more than $3 billion in annualized sales in the midterm, which we define as within the next 3 years. The outlook in each of our markets remains positive, and our market positions are quite strong. Third, as we capture this growth, we expect to deliver powerful incrementals. We already have the required production capacity and technical capabilities in place, and the cost and the capital are already reflected in our financials. This is a tremendous opportunity for our shareholders.

該框架有 3 個主要組成部分：首先，我們認為第一季將是全年最低的季度。我們將從這裡開始改進。其次，我們預期中期（我們定義為未來 3 年內）的年化銷售額將成長超過 30 億美元。我們每個市場的前景仍然樂觀，我們的市場地位也相當穩固。第三，當我們抓住這一成長時，我們期望實現強大的增量。我們已經具備了所需的生產能力和技術能力，成本和資金也反映在我們的財務上。這對我們的股東來說是一個巨大的機會。

In the 3 months since our last call, our confidence in these 3 components has only increased. We expect our sales to grow from here and we have reflected this in our second quarter guidance. Today, I'd like to review each component of the framework and share some of the reasons why our confidence has grown. Let me begin with the first component. Our expectation that quarter 1 will be the lowest quarter of 2024. Near term, we expect optical and display to be the biggest drivers of our improvement.

自從上次電話會議以來的 3 個月裡，我們對這 3 個組件的信心只增不減。我們預計我們的銷售額將從這裡開始成長，我們已在第二季度指導中反映了這一點。今天，我想回顧一下該框架的每個組成部分，並分享一些我們信心增強的原因。讓我從第一個組成部分開始。我們預計第一季將是 2024 年最低的季度。

In Optical Communications, carrier inventory drawdowns have been the primary source of our below-trend sales. Once carrier inventory starts returning to more normal levels and our customers resume purchasing to support their deployment rates, we would expect to see our order book grow. And that's exactly what is happening.

在光通訊領域，營運商庫存減少是我們銷售低於趨勢的主要原因。一旦營運商庫存開始恢復到更正常的水平，並且我們的客戶恢復採購以支援他們的部署率，我們預計我們的訂單將會成長。這正是正在發生的事情。

Our order book grew nicely from fourth quarter levels. This and our regular conversations with large carrier customers indicate that the gap between our sales and customer deployments is moderating. As a result, we expect carrier sales to increase from first quarter levels. Additionally, in the enterprise portion of our optical business, we expected our recent wins for AI data centers will translate into orders and sales during the year. In display, panel makers increased their utilization rates late in the first quarter, and we expect the higher utilization to continue into the second quarter, driven by expected growth in retail demand resulting from midyear promotions.

我們的訂單量較第四季水準有了良好成長。這以及我們與大型營運商客戶的定期對話表明，我們的銷售和客戶部署之間的差距正在縮小。因此，我們預計營運商銷售額將較第一季水準成長。此外，在我們光學業務的企業部分，我們預計最近在人工智慧資料中心的勝利將轉化為今年的訂單和銷售額。在顯示器方面，面板製造商在第一季末提高了利用率，我們預計在年中促銷帶來的零售需求預期成長的推動下，較高的利用率將持續到第二季​​。

For the full year 2024, our expectations for the retail glass market remain unchanged from our January view and consistent with industry expectations. We anticipate relatively flat television unit volume, another year of television screen size growth, and some recovery in PC demand. This leads to mid-single-digit percent growth in glass volume at retail versus 2023. As a result, we expect our financial performance in display to improve significantly from our first quarter run rate. Ed will share more details on that in just a few moments.

對於2024年全年，我們對零售玻璃市場的預期與1月的觀點保持不變，與產業預期一致。我們預期電視單位銷售將相對持平，電視螢幕尺寸又將成長一年，個人電腦需求將有所回升。與 2023 年相比，這導致零售玻璃銷售出現中個位數百分比成長。埃德將在稍後分享更多細節。

Now let's move to the second component of our framework. Our expectation that we will add more than $3 billion in annualized sales within the next 3 years. Our positive outlook for each of our market opportunities, results from our leadership positions and the power of the secular trends that we're addressing through innovation and close collaboration with customers. There's a lot more Corning to be had in our markets.

現在讓我們轉向框架的第二個組成部分。我們預計未來 3 年內年銷售額將增加超過 30 億美元。我們對每個市場機會的積極前景，源於我們的領導地位以及我們透過創新和與客戶的密切合作應對的長期趨勢的力量。我們的市場上還有更多康寧產品。

In Optical Communications, fiber is the ascendant technology, and we're the clear market leader. As I've covered in the last 2 calls, fiber shipments are more than 30% below trend. We fully expect that gap to close, adding more than 40% to our overall optical communication sales. In conversations with our large carrier customers during the quarter, they reinforced their commitment to increasing fiber deployments in 2024 and beyond. Additionally, we expect BEAD-related projects for network builds in underserved areas to add to our addressable market for the next several years. The industry expects funding approvals to begin late this year, leading to spending in 2025.

在光通訊領域，光纖是方興未艾的技術，我們是明顯的市場領導者。正如我在最近兩次電話會議中提到的，光纖出貨量比趨勢水準低 30% 以上。我們完全預期這一差距將會縮小，從而為我們的整體光通訊銷售額增加 40% 以上。在本季與我們的大型營運商客戶的對話中，他們強化了在 2024 年及以後增加光纖部署的承諾。此外，我們預計在服務欠缺地區建設網路的 BEAD 相關項目將在未來幾年增加我們的潛在市場。業界預計資金審批將於今年稍晚開始，並在 2025 年支出。

Next, generative AI is an especially attractive opportunity for us, it creates significant demand for passive optical connectivity solutions and strengthens our value proposition and our competitive advantages. All data centers consist of a front-end network, connecting racks of CPUs. To meet the computational demands of AI, customers are building a new fiber-rich second network to connect GPUs, which increases our market opportunity.

其次，生成式人工智慧對我們來說是一個特別有吸引力的機會，它創造了對無源光連接解決方案的巨大需求，並增強了我們的價值主張和競爭優勢。所有資料中心均由連接 CPU 機架的前端網路組成。為了滿足人工智慧的運算需求，客戶正在建立新的富含光纖的第二網路來連接 GPU，這增加了我們的市場機會。

Now we'll see this in our financials as customers begin to build large GPU clusters and adopt our latest high-density innovations. Customers want fast deployment. Our preconnectorized structured cabling solutions offer big installation time advantages. And the GPU clusters, which pack a very large amount of computing power per rack require smaller, tensor cables, making connector size and cable diameter, important requirements. To meet these high-density requirements, we've introduced new-to-the-world fiber cable and connectivity products.

現在，隨著客戶開始建立大型 GPU 叢集並採用我們最新的高密度創新技術，我們將在財務數據中看到這一點。客戶希望快速部署。我們的預連接器結構化佈線解決方案具有巨大的安裝時間優勢。每個機架包含大量運算能力的 GPU 叢集需要更小的張量電纜，這使得連接器尺寸和電纜直徑成為重要要求。為了滿足這些高密度要求，我們推出了全新的光纖電纜和連接產品。

At OFC a few weeks ago, we introduced RocketRibbon cable with Flow Ribbon technology that can reduce cable diameter by 60% with fibers per cable approaching 7,000. A key part of delivering this innovation is our Contour optical fiber, which has a 40% smaller cross-sectional area than legacy fibers. Now our ability to integrate innovations across fiber, cable and connectors, to create end-to-end solutions is a unique competitive advantage, and we're accumulating significant customer wins for upcoming AI data center builds. In our recent customer wins, our revenue is low single-digit hundreds of dollars per GPU.

幾週前，我們在 OFC 上推出了採用 Flow Ribbon 技術的 RocketRibbon 光纜，可將光纜直徑減少 60%，每根光纜的光纖數量接近 7,000 根。實現這項創新的關鍵部分是我們的 Contour 光纖，它的橫截面積比傳統光纖小 40%。現在，我們整合光纖、電纜和連接器創新來創建端到端解決方案的能力是一種獨特的競爭優勢，我們正在為即將建造的人工智慧資料中心累積大量客戶。在我們最近贏得的客戶中，我們的收入僅為每個 GPU 數百美元。

We believe the customer density needs combined with our technology superior performance will sustain these attractive sales attach rates long term. Let's turn to automotive. The U.S. EPA announced new multi-pollutant standards last month. They include a strong particulate emissions limit that will require gasoline particulate filter adoption on U.S. gasoline vehicles, including hybrids, as early as 2026 for model year 2027. We are the inventor and the clear market leader in GPF and these standards increase our environmental technologies content opportunity by 2 to 3 times per U.S. ICE vehicle. This adoption offers hundreds of millions of dollars of growth for us in the U.S. alone, even in the face of BEV adoption. Keep in mind, we're also pursuing additional more Corning content opportunities in the automotive industry by introducing our automotive glass solutions, which are building success and momentum and are being adopted by both ICE and BEV platforms.

我們相信，客戶密度需求與我們卓越的技術性能相結合將長期維持這些有吸引力的銷售附加率。讓我們轉向汽車。美國環保署上個月宣布了新的多污染物標準。其中包括嚴格的顆粒物排放限制，要求最早於2026 年在2027 年車型上在美國汽油車（包括混合動力車）上採用汽油顆粒物過濾器。增加了我們的環境技術含量每輛美國 ICE 車輛的機會增加 2 至 3 倍。即使面對純電動車的採用，這種採用僅在美國就為我們帶來了數億美元的成長。請記住，我們也透過推出我們的汽車玻璃解決方案，在汽車行業尋求更多康寧內容機會，這些解決方案正在取得成功和勢頭，並被 ICE 和 BEV 平台採用。

In Mobile Consumer Electronics, our goal is to outpace the market by increasing the content we provide for each device. Our sales have consistently outpaced the market over the last decade, and we expect that to continue to be the case going forward. We've done this by advancing the state of the art for cover materials and adding more content per device, a classic more Corning play. We have a strong innovation portfolio in support of our close collaborations with leading OEMs, and we expect to continue delivering new products that increase our value per device.

在行動消費電子領域，我們的目標是透過增加為每台設備提供的內容來超越市場。在過去十年中，我們的銷售額一直超過市場，我們預計未來仍將如此。我們透過提高封面材料的藝術水平並為每個設備添加更多內容來做到這一點，這是一個經典的康寧遊戲。我們擁有強大的創新產品組合來支持我們與領先的 OEM 廠商的密切合作，並且我們希望繼續提供新產品，以提高我們每台設備的價值。

In display, we expect volume growth at retail to be driven mainly by television screen size growth. In fact, in the first quarter, sales of 85-inch TVs increased by more than 50% year-over-year. Overall, we expect to capture growth in display because we are the undisputed technology leader. Our successful development of Gen 10.5 and advanced capabilities aligned with the continued move to larger-sized TVs produced on the lowest cost platforms for large displays.

在顯示器方面，我們預計零售量的成長將主要由電視螢幕尺寸的成長所推動。事實上，第一季85吋電視銷量年增超過50%。總體而言，我們預計將獲得顯示器領域的成長，因為我們是無可爭議的技術領導者。我們對 Gen 10.5 的成功開發和先進功能與持續轉向在最低成本的大型顯示器平台上生產的更大尺寸電視相一致。

Finally, we continue to build entirely new product platforms to capture opportunities in new categories. Examples include automotive glass solutions to support high autonomy systems, the growing opportunity to localize U.S. solar supply and pharmaceutical packaging. In sum, we expect the power of our market leadership positions and more Corning innovations to allow us to grow faster than our markets in advance our $3 billion plus opportunity.

最後，我們繼續建立全新的產品平台，以抓住新類別的機會。例子包括支援高度自主系統的汽車玻璃解決方案、美國太陽能供應和藥品包裝本地化的日益增長的機會。總之，我們預期我們的市場領導地位和更多康寧創新的力量將使我們能夠比市場更快成長，從而提前獲得 30 億美元以上的機會。

Now I'd like to move to the third component of the framework. Our expectation for powerful incrementals as we add sales. In the fourth quarter of 2022, we initiated a set of actions to restore historic productivity ratios and also to raise price to share the impact of inflation more equitably with our customers. Since we initiated these activities, we have expanded our gross margin by 320 basis points despite sales being down almost $400 million.

現在我想轉向該框架的第三個組成部分。我們期望隨著銷售額的增加，強勁的增量。 2022 年第四季度，我們啟動了一系列行動，以恢復歷史生產力比率，並提高價格，以便與客戶更公平地分擔通膨的影響。自從我們開展這些活動以來，儘管銷售額下降了近 4 億美元，但我們的毛利率仍提高了 320 個基點。

Our actions have established a significantly stronger profitability and cash flow base even while our P&L includes the costs and technical capabilities necessary to support $3 billion plus in additional sales. Importantly, we have put processes and governance mechanisms in place to generate operating leverage as we grow sales. So as I close today, here's what I'd like to leave you with. Our first quarter results show encouraging signs of improving market conditions. We continue to expect this quarter will be the lowest quarter for the year. Additionally, we've established a higher profitability and cash flow base.

我們的行動已經建立了顯著更強的獲利能力和現金流基礎，儘管我們的損益表包括支援 30 億美元以上額外銷售額所需的成本和技術能力。重要的是，我們已經制定了流程和治理機制，以便在銷售成長時產生營運槓桿。今天結束時，我想向大家介紹以下內容。我們第一季的業績顯示出市場狀況改善的令人鼓舞的跡象。我們仍然預計本季將是今年最低的季度。此外，我們也建立了更高的獲利能力和現金流基礎。

Finally, as our markets improve, we have the opportunity to increase our annualized sales by more than $3 billion. As we capture that growth, we expect to deliver powerful incrementals because the required capacity, the technical capabilities are already in place and the costs are already in our financials. This represents a terrific opportunity for our shareholders. Our second quarter guidance reflects higher sales and strong incremental profit. And you'll hear more about this from Ed.

最後，隨著我們市場的改善，我們有機會將年銷售額增加超過 30 億美元。當我們抓住這一成長機會時，我們預計將帶來強大的增量，因為所需的產能、技術能力已經到位，而且成本也已計入我們的財務中。這對我們的股東來說是一個絕佳的機會。我們第二季的指導反映了更高的銷售額和強勁的利潤增量。你會從艾德那裡聽到更多關於這方面的資訊。

We will continue making progress on this opportunity in 2024. Think of us as continuing to march up. I look forward to updating you at investor conferences in the next few months. Now before I turn the call over to Ed, I'd like to take a moment to recognize Jeff Evenson, Executive Vice President and Chief Strategy Officer, who will retire from Corning at the end of May.

2024 年，我們將繼續利用這個機會取得進展。我期待在未來幾個月的投資者會議上向您通報最新情況。現在，在將電話轉給 Ed 之前，我想花點時間向執行副總裁兼首席策略長 Jeff Evenson 致意，他將於 5 月底從康寧退休。

I want to thank Jeff for his 13 years of outstanding leadership at our company. During his tenure, he's helped grow the company, develop frameworks that define our priorities and guide our actions and raised awareness of glass as a key enabling material. He also increased Corning's focus on sustainability. Jeff, we wish you the very best. With that, I'll turn things over to Ed.

我要感謝 Jeff 在我們公司 13 年來的出色領導。在他任職期間，他幫助公司發展，開發了定義我們優先事項並指導我們行動的框架，並提高了人們對玻璃作為關鍵支援材料的認識。他也加強了康寧對永續發展的關注。傑夫，我們祝你一切順利。有了這個，我會把事情交給艾德。

Thank you, Wendell, and good morning, everyone. Our first quarter sales were $3.26 billion, and EPS was $0.38, at the high end of our guidance. Our actions to increase price and improve productivity ratios are paying off. In the first quarter, despite lower year-over-year sales, we grew gross margin by 160 basis points. We also grew free cash flow by more than $300 million versus the first quarter of 2023. Overall, we have established a significantly stronger profitability and cash flow base, and we expect to grow from first quarter levels.

謝謝你，溫德爾，大家早安。我們第一季的銷售額為 32.6 億美元，每股收益為 0.38 美元，處於我們指導的上限。我們提高價格和提高生產力的行動正在發揮成效。第一季度，儘管銷售額較去年同期下降，但我們的毛利率增加了 160 個基點。與2023 年第一季相比，我們的自由現金流也成長了超過3 億美元。上實現成長。

In the second quarter, we expect sales of approximately $3.4 billion, with strong incremental profit and EPS in the range of $0.42 to $0.46. Let's take a closer look at our segment results. In Optical Communications, sales for the first quarter were $930 million, down 17% year-over-year, reflecting temporarily lower carrier demand as customers continued to draw down inventory. Net income for the quarter was $100 million, down 37% year-over-year, reflecting the lower volume.

我們預計第二季銷售額約為 34 億美元，利潤增量強勁，每股收益在 0.42 美元至 0.46 美元之間。讓我們仔細看看我們的細分結果。在光通訊領域，第一季銷售額為 9.3 億美元，年減 17%，反映出由於客戶持續減少庫存，營運商需求暫時下降。該季度淨利潤為 1 億美元，年減 37%，反映出銷量下降。

We are seeing clear signs of improving market conditions, and we think Q1 represents an inflection point. Sequentially, sales grew in both carrier and enterprise in the first quarter, which is more favorable than normal seasonality. And our order rates are steadily increasing as some of our carrier customers are reaching the end of their inventory drawdowns. We believe we're well positioned to take advantage of the industry's long-term growth drivers, specifically broadband, 5G, cloud computing and AI. We will also benefit from public infrastructure investments to help connect the unconnected and bring broadband to a much larger share of the U.S. population.

我們看到市場狀況改善的明顯跡象，我們認為第一季代表了一個轉折點。隨後，第一季營運商和企業的銷售額均有所成長，這比正常的季節性更為有利。隨著我們的一些承運商客戶的庫存消耗即將結束，我們的訂單率正在穩步上升。我們相信，我們有能力利用產業的長期成長動力，特別是寬頻、5G、雲端運算和人工智慧。我們還將受益於公共基礎設施投資，以幫助連接未連接的人，並將寬頻帶給更多的美國人口。

Moving to Display Technologies. As we shared with you in January, panel makers reduced their utilization levels in the fourth quarter in response to a softer retail selling season. Additionally, as expected, panel makers utilization levels remained low in the first quarter to align supply to demand. Our first quarter sales were $872 million, up 14% year-over-year and net income was $201 million, up 26% year-over-year. The increase in net income was primarily driven by higher volume and pricing actions taken in the second half of 2023.

轉向顯示技術。正如我們在一月份與您分享的那樣，面板製造商在第四季度降低了利用率水平，以應對零售銷售季節的疲軟。此外，正如預期的那樣，第一季面板製造商的利用率仍然較低，以調整供需關係。我們第一季的銷售額為 8.72 億美元，年增 14%，淨利為 2.01 億美元，年增 26%。淨利潤的成長主要是由於 2023 年下半年採取的銷售和定價行動增加所致。

First quarter glass price was consistent with the fourth quarter of 2023 as expected. Now it's worth noting that first quarter net income was negatively impacted by our decision to reduce our production to align to the lower volume we experienced in the fourth and first quarters. Our profitability will be higher in the second quarter. Looking ahead to the second quarter, we expect panel makers to run at higher utilization rates, driven by growth in retail demand resulting from midyear promotions, and we will return our production volume to more normal levels. We expect the second quarter glass market and our volume to increase sequentially as a result of higher panel maker utilization, and we expect glass price to be consistent with the first quarter.

第一季玻璃價格與2023年第四季預期一致。現在值得注意的是，我們決定減少產量以適應第四季度和第一季的較低產量，這對第一季淨利潤產生了負面影響。第二季度我們的獲利能力將會更高。展望第二季度，在年中促銷帶來的零售需求成長的推動下，我們預計面板製造商的利用率將提高，並且我們將把產量恢復到更正常的水平。我們預計，由於面板製造商利用率提高，第二季玻璃市場和我們的銷售量將連續成長，我們預計玻璃價格將與第一季保持一致。

For the full year, our expectations for the retail market remain unchanged from our January view and are consistent with industry expectations. Specifically, we anticipate relatively flat television unit volume, another year of TV screen size growth, and some recovery in PC demand. This adds mid-single-digit percent growth in glass volume at retail versus 2023. Overall, we expect the pricing environment to remain favorable.

就全年而言，我們對零售市場的預期與 1 月的觀點一致，與產業預期一致。具體來說，我們預期電視單位銷售將相對持平，電視螢幕尺寸又將成長一年，個人電腦需求將有所回升。與 2023 年相比，零售玻璃銷售量將實現中等個位數百分比成長。

Before I move on, I want to take a minute to address currency exchange rates. As a reminder, we have actively hedged our foreign currency exposure over the past decade. This serves as an effective tool to reduce earnings volatility, protect our cash flow, enhance our ability to invest and protect shareholder returns. We're very pleased with our hedging program and the economic certainty it provides. And we've received more than $2.5 billion in cash under our hedge contracts since their inception.

在繼續之前，我想花一點時間討論一下貨幣匯率。提醒一下，我們在過去十年中積極對沖我們的外匯風險。這是減少獲利波動、保護現金流、增強投資能力和保護股東回報的有效工具。我們對我們的對沖計劃及其提供的經濟確定性感到非常滿意。自對沖合約成立以來，我們已收到超過 25 億美元的現金。

Our most significant hedge contracts are for the Japanese yen, which support our yen core rate of 107 through the end of 2024. As we look beyond 2024, our goal is to maintain an appropriate return on our display business through a combination of currency hedges and industrial solutions like price increases. First, on hedging, we are actively working to improve our hedge coverage for 2025 and into the future. The yen forward curve works in our favor. So if you go out a year, the forward rate is about JPY 8 stronger than today's spot rate; out 2 years, it's approximately 14; and so on.

我們最重要的對沖合約是日圓，它在 2024 年底之前支持我們的日圓核心匯率 107。首先，在對沖方面，我們正積極努力提高2025年及未來的避險覆蓋範圍。日元遠期曲線對我們有利。因此，如果您出去一年，遠期匯率比今天的即期匯率強約 8 日圓； 2年後，大約是14年；等等。

The current yen spot rate is significantly weaker than the 30-year average of approximately JPY 110. We have made some progress on our hedges and are now partially hedged for 2025, and we'll continue to look for attractive opportunities to increase our hedges. Second, our customers sell panels in U.S. dollars, and they buy glass from us in yen. They are benefiting from the current weak yen rate. We plan to share the economics more appropriately with our customers by raising glass prices in yen.

目前日圓即期匯率明顯弱於約110日圓的30年平均水準。其次，我們的客戶以美元出售面板，並以日元向我們購買玻璃。他們受益於當前疲軟的日圓匯率。我們計劃透過提高日圓玻璃價格來更適當地與客戶分享經濟。

We successfully took a first step in this direction in the second half of 2023. We will continue to keep you updated as we make progress. Moving to Specialty Materials. Sales in the first quarter were $454 million, up 12% year-over-year, driven by strong demand for our premium smartphone cover materials as well as semiconductor-related products. Net income was $44 million, up 13% year-over-year, driven by higher volume. Our more Corning approach will continue to help us win as handheld and IT markets recover.

我們在 2023 年下半年成功地朝這個方向邁出了第一步。轉向特種材料。第一季銷售額為 4.54 億美元，年增 12%，這得益於對我們優質智慧型手機外殼材料以及半導體相關產品的強勁需求。在銷量增加的推動下，淨利潤為 4,400 萬美元，年增 13%。隨著手持設備和 IT 市場的復甦，我們更多的康寧方法將繼續幫助我們獲勝。

Additionally, over time, we anticipate growth from new innovations such as bendable glass and augmented reality as they are adopted more broadly. Environmental Technologies first quarter sales were $455 million, up 6% year-over-year, driven by increased GPF adoption in China which more than offset a decline in heavy-duty diesel in North America, an impact we expect to continue through 2024. Net income was $105 million, up 28% year-over-year, driven by higher volume and improved operating performance. In Life Sciences, Sales in the first quarter were $236 million, down 8% versus the first quarter of 2023 as customers in North America and Europe continue to draw down their inventory.

此外，隨著時間的推移，我們預計可彎曲玻璃和擴增實境等新創新將得到更廣泛的採用，從而帶來成長。環境技術第一季銷售額為 4.55 億美元，年增 6%，主要得益於中國 GPF 採用率的增加，這足以抵消北美重型柴油銷量的下降，我們預計這一影響將持續到 2024 年。銷量增加及經營績效改善的推動，營收為1.05 億美元，較去年同期成長28%。在生命科學領域，由於北美和歐洲的客戶繼續減少庫存，第一季銷售額為 2.36 億美元，較 2023 年第一季下降 8%。

Net income was $13 million, up 44% year-over-year, reflecting improved productivity. Turning to Hemlock and Emerging Growth businesses. Sales in the first quarter were $311 million, down 19% year-over-year, reflecting lower pricing for solar grade polysilicon and lower sales in pharmaceutical technologies from the completion of volume commitments for COVID-related products.

淨利潤為 1300 萬美元，年增 44%，反映出生產力的提高。轉向鐵杉和新興增長業務。第一季銷售額為 3.11 億美元，年減 19%，反映出太陽能級多晶矽定價較低，以及新冠相關產品銷售承諾完成後製藥技術銷售額下降。

Now let's turn to our outlook. Last quarter, we shared our expectation that the first quarter would be the low quarter of the year, and we're even more confident that, that is the case. In the second quarter, we expect sales to grow sequentially to approximately $3.4 billion with strong incremental profit and EPS in the range of $0.42 to $0.46. We also anticipate free cash flow to grow sequentially by approximately $300 million in the second quarter and we expect CapEx of approximately $1.2 billion for the year.

現在讓我們來談談我們的展望。上個季度，我們預計第一季將是今年的最低季度，我們更有信心，事實確實如此。我們預計第二季銷售額將季增至約 34 億美元，利潤增量強勁，每股收益介於 0.42 美元至 0.46 美元之間。我們也預計第二季自由現金流將季增約 3 億美元，預計今年資本支出約 12 億美元。

Wendell outlined our framework to drive strong returns on our existing innovation and capacity investments and shared our expectations for powerful incremental profit and cash flow. Given this opportunity, we've begun to think about our approach to the allocation of that cash going forward. As a reminder, we prioritize investing for organic growth opportunities.

溫德爾概述了我們的框架，以推動現有創新和產能投資的強勁回報，並分享了我們對強勁增量利潤和現金流的期望。有了這個機會，我們開始考慮未來分配現金的方法。提醒一下，我們優先考慮有機成長機會的投資。

And as we've shared today, in the midterm, we have the capabilities and capacity in place to add more than $3 billion in annualized sales with minimal cash investment. You can see that reflected in our CapEx expectations for 2024. This contributes to the strong free cash flow we expect to generate. Additionally, we maintain a strong and efficient balance sheet, and we're in great shape. We have one of the longest debt centers in the S&P 500. Our current average debt maturity is about 23 years with about only $1 billion in debt coming due over the next 5 years, and we have no significant debt due -- coming due in any given year.

正如我們今天所分享的，從中期來看，我們有能力以最少的現金投資增加超過 30 億美元的年銷售額。您可以看到這反映在我們對 2024 年的資本支出預期中。此外，我們保持著強大且有效率的資產負債表，並且狀況良好。我們是標準普爾 500 指數中最長的債務中心之一。年份。

So as our cash flow increases, we remain committed to providing returns to our shareholders. We have grown our dividend 40% since 2019 and our dividend yield is top quartile in the S&P 500, and we will continue to be opportunistic on share repurchases. I look forward to sharing more in the coming months as we continue to make progress building a solid foundation for durable, profitable long-term growth. Now I'll turn things back over to Ann.

因此，隨著我們現金流的增加，我們仍然致力於為股東提供回報。自 2019 年以來，我們的股息成長了 40%，我們的股息殖利率在標準普爾 500 指數中名列前茅，我們將繼續在股票回購方面保持機會主義。我期待在未來幾個月分享更多信息，因為我們將繼續取得進展，為持久、盈利的長期增長奠定堅實的基礎。現在我會把事情交還給安。

Great. Thank you, Ed. We're ready for our first question.

偉大的。謝謝你，艾德。我們準備好回答第一個問題了。

(Operator Instructions)

（操作員說明）

Our first question comes from the line of Wamsi Mohan with Bank of America.

我們的第一個問題來自瓦姆西·莫漢 (Wamsi Mohan) 與美國銀行的聯繫。

If I could, one for Wendell, one for Ed. Wendell, on the commentary around the data center opportunity around AI. I was wondering if you could just share some color on when you think these incremental orders and revenue will flow into Corning. And these hundreds of -- low hundreds of dollars per GPU, can you just break that down into maybe just a little bit more color on where exactly that's coming from? Is this rack-to-rack connections in optical and data center? And how large do you think the TAM for that is? And I have a follow-up for Ed please.

如果可以的話，一份給溫德爾，一份給艾德。 Wendell，關於人工智慧資料中心機會的評論。我想知道您是否可以分享一些您認為這些增量訂單和收入將流入康寧的觀點。每個 GPU 的成本高達數百美元，您能否將其分解為更多顏色，以了解其具體來源？這是光纖和資料中心中的機架到機架連接嗎？您認為 TAM 有多大？我有一個關於艾德的後續行動。

So the timing of when we'll start to see it in our financials. So we start with a pretty large business and enterprise, all related to the sort of front-end -- we think about it as a front-end network, which is all connecting the CPUs. So off over that base, you'll start to see sort of a relatively robust revenue growth assuming the orders that we've closed here all ship in the back half of this year. You're just going to start to see that momentum begin to build.

所以我們什麼時候開始在我們的財務數據中看到它。因此，我們從一個相當大的企業和企業開始，所有這些都與前端相關——我們將其視為前端網絡，它全部連接 CPU。因此，在這個基礎上，假設我們在這裡完成的訂單全部在今年下半年發貨，您將開始看到相對強勁的收入成長。您將開始看到這種勢頭開始增強。

Where does it come from? Well, the simplest way to think about this is let's just start at the rack level. A typical front-end rack filled with CPUs has about 32 fibers to sort of come into that top of the rack switch, right, 16 ports, 2 fibers per port. There's different ways to do it. But assuming one of these back-end network, GPU racks will tend to have on the order of a couple of [100] servers. To service those, you need more like 256 fibers on that same rack. So you've got about an 8x increase in the amount of fibers per rack. So this is what leads to the demand for us to do a more Corning innovation, how do you fit 8 times as many light pipes into fundamentally the same area. And that's why you see all of our new product innovation, what we've been working on the last few years is aimed at that. So as you start to see those large cluster GPU installations begin is when you should start to see it in our numbers, Wamsi. Was that -- did that answer your question?

它從何而來？好吧，考慮這個問題的最簡單方法是讓我們從機架等級開始。一個典型的裝有 CPU 的前端機架大約有 32 根光纖進入機架頂部交換器（右側），16 個端口，每個端口 2 根光纖。有不同的方法可以做到這一點。但假設其中一個後端網絡，GPU 機架往往有幾個 [100] 個伺服器。為了服務這些，您需要在同一個機架上安裝更多類似 256 根光纖。因此，每個機架的光纖數量增加了約 8 倍。因此，這導致我們需要進行更多康寧創新，即如何將 8 倍的光管安裝到基本上相同的區域。這就是為什麼你會看到我們所有的新產品創新，我們過去幾年一直在努力實現這一目標。因此，當您開始看到那些大型叢集 GPU 安裝開始時，您應該開始在我們的資料中看到它，Wamsi。那是——這回答了你的問題嗎？

Yes, it did. I wonder, Wendell, if you might also comment on the B100, which seems to be a much more higher density solution than the H100 and the need for bandwidth probably -- order of magnitude higher between racks.

是的，它確實。我想知道，Wendell，您是否也可以對 B100 發表評論，它似乎是比 H100 密度更高的解決方案，而且對頻寬的需求可能 - 機架之間的數量級更高。

So you -- that is a great observation, and it is in line with the sort of secular trend that we see that basically says we have plenty of innovation we have to get done because density continues to increase as well as the bandwidth requirements increase. And so what that does is it reduces the amount of distance with which you can travel in an electron and therefore pushes the photons closer and closer to sort of the beachfront of those GPUs, which is opening up an entire new set of categories for us -- for our flat glass, for our ability to couple light into various formats. And so in a way what you're describing is what's leading to a whole new family of innovations upon which we are working diligently, Wamsi.

所以你——這是一個很好的觀察，它符合我們看到的那種長期趨勢，基本上說我們有大量的創新需要完成，因為密度持續增加以及頻寬需求增加。因此，它的作用是減少了電子中移動的距離，從而將光子推得越來越接近那些 GPU 的海濱，這為我們開闢了一組全新的類別 - - 因為我們的平板玻璃，因為我們能夠將光耦合成各種格式。因此，從某種程度上來說，你所描述的正是導致我們正在努力工作的全新創新系列的原因，Wamsi。

Okay. I appreciate the answer. And maybe quickly for Ed. I appreciate the yen commentary here as we look into 2025, there seem to be a lot of moving pieces for display between yen rate and the pricing you alluded to? How large is the partial hedge or where do you expect to -- as you exit this year, where do you think you will be hedged for 2025?

好的。我很欣賞你的回答。對艾德來說也許很快。當我們展望 2025 年時，我很欣賞這裡對日圓的評論，日圓匯率和您提到的定價之間似乎有很多變化？部分對沖規模有多大，或者您預計在哪裡——當您今年退出時，您認為 2025 年將在哪裡進行對沖？

What do you think is the sort of core rate that if we were to shift next year to a different core rate, where would you think that would be using all the tools that you have? And if you could perhaps just roll it up at the high level, including the price changes that you spoke about. How should we think about display at sort of the top line level, given all these different changes?

您認為如果我們明年轉向不同的核心速率，您認為會在哪裡使用您擁有的所有工具？如果您可以將其匯總到較高水平，包括您談到的價格變化。考慮到所有這些不同的變化，我們應該如何考慮頂層的顯示？

Yes. Thanks for the question, Wamsi, and I understand the desire to have all that information. I think the simplest way to think about it is we are committed to generating return in this business. And we think we will do that in 2024. We did that in 2023. And our goal is to get the economics to be similar as we go forward regardless of where the yen winds up and where we are able to hedge.

是的。感謝瓦姆西提出的問題，我理解想要獲得所有這些資訊的願望。我認為最簡單的思考方式是我們致力於在這項業務中創造回報。我們認為我們會在2024 年做到這一點。對沖。

We'll be -- we're good at hedging. We've got a long-standing program. We will look for attractive opportunities to build our 2025 hedge portfolio. And if the yen breaks our way, we'll go out beyond that. I think it's too early to talk about core rate or that kind of discussion, but I think you should just think about our display economics that we'll deliver in 2024 as being the way to think about our display business. So we'll raise price to offset the impact of the yen and the net of those two things to get you to the same place. That's the way we're thinking about it. We've made some nice progress on hedging, and we'll continue to keep you updated as we go. I think that's the way you all should think about it.

我們會——我們擅長對沖。我們有一個長期計劃。我們將尋找有吸引力的機會來建立我們的 2025 年對沖投資組合。如果日圓貶值，我們將繼續採取行動。我認為現在談論核心率或此類討論還為時過早，但我認為您應該考慮一下我們將在 2024 年提供的顯示器經濟學，以此作為思考我們顯示器業務的方式。因此，我們將提高價格以抵消日圓的影響以及這兩件事的影響，讓您達到相同的目標。這就是我們思考的方式。我們在對沖方面取得了一些不錯的進展，我們將繼續向您通報最新情況。我想大家都應該這樣思考。

Operator, we're ready for our next question.

接線員，我們準備好回答下一個問題了。

Our next question comes from the line of Meta Marshall with Morgan Stanley.

我們的下一個問題來自梅塔·馬歇爾與摩根士丹利的對話。

Great. Maybe a question for me. You noted that you have the capacity kind of today with capital you've already built to have $3 billion of additional revenue. You noted that you expect to kind of grow over the next 3 years by more than that $3 billion. And so just trying to get a sense of where you think that the biggest opportunities or investments will be over the next couple of years?

偉大的。也許有個問題想問我。您指出，您擁有今天的能力和已經建立的資本，可以帶來 30 億美元的額外收入。您指出，您預計未來 3 年的成長將超過 30 億美元。那麼，只是想了解一下您認為未來幾年最大的機會或投資將在哪裡？

And then maybe a second question. There's been obviously, a lot made of BEAD timing and understanding that you're seeing kind of improving demand trends on service provider as they come out of inventory digestion, but just kind of what your latest thoughts are around kind of BEAD timing as an enhancement to the optical business.

也許還有第二個問題。顯然，有很多關於 BEAD 時機和理解的內容，您看到服務提供者的需求趨勢有所改善，因為它們來自庫存消化，但只是您最新的想法是圍繞 BEAD 時機作為一種增強到眼鏡行業。

I'll start with the second one and then maybe, Ed, you can discuss the first. So on BEAD timing, we tend to be relatively conservative in our outlook of how effective the government can be in allocating resources to build networks. We're in strong support of this. It requires U.S. content and we think it's aimed well and it will be done. The funds have been allocated. But the process, we would tend to be a little -- our expectations are being a little slower than what you see as the industry overall. We think they'll get allocated this year and you won't really start to see spending until next year. That's our current point of view (inaudible). Does that answer your question?

我將從第二個開始，然後艾德，你也許可以討論第一個。因此，在 BEAD 時機上，我們對於政府在分配資源建設網絡方面的有效性的看法往往相對保守。我們對此表示大力支持。它需要美國的內容，我們認為它的目標很好並且將會完成。資金已撥付。但在這個過程中，我們的預期會比你所看到的整個產業慢一些。我們認為它們會在今年得到分配，直到明年你才會真正開始看到支出。這是我們目前的觀點（聽不清楚）。這是否回答你的問題？

Yes, that's helpful.

是的，這很有幫助。

Yes, Meta, on your other question. So first, I would start with we actually have capacity to do much more than $3 billion in sales. I think we're framing it up as we see it. Where those sales come from, where those opportunities come from will depend on whether we need to add anything beyond what we have in place today, but we feel very confident in supporting a number well above $3 billion.

是的，Meta，關於你的另一個問題。首先，我首先要說的是，我們實際上有能力實現超過 30 億美元的銷售額。我認為我們正在按照我們所看到的方式來建造它。這些銷售額從何而來，這些機會從何而來將取決於我們是否需要在現有的基礎上增加任何內容，但我們非常有信心支持遠超過 30 億美元的數字。

There are certainly a few places where we might spend a little money, but it's all encapsulated in the CapEx guide we gave for 2024, and we ramped our capital spend down in the back half of 2023. So sitting here today, I don't see any need for significant amount of capital. A good example might be as we build out our auto glass business, and we continue to win there. We might need to spend a little bit, but not the kind of capital you're used to when you build like melting capacity for glass, more on the finishing side. So I think we -- our goal is to generate a significant amount of cash flow off of the existing capacity we have in place.

當然，我們可能會在一些地方花一點錢，但這都包含在我們為 2024 年提供的資本支出指南中，並且我們在 2023 年下半年減少了資本支出。看是否需要大量資金。一個很好的例子可能是我們建立了汽車玻璃業務，並且我們繼續在那裡獲勝。我們可能需要花一點錢，但不是你在建立玻璃熔化能力時所習慣的那種資本，更多的是在精加工方面。所以我認為我們的目標是利用我們現有的產能產生大量現金流。

Our next question comes from the line of Martin Yang with Oppenheimer.

我們的下一個問題來自馬丁楊和奧本海默的對話。

I would like to ask about your opinion regarding newly announced subsidy programs for home appliance trading in China. I know your retail estimates on PV sales this year hasn't changed. Do you think this could be a new catalyst to drive upside to retail TV market and your glass volume in '24?

我想詢問您對中國新公佈的家電貿易補貼計劃的看法。我知道你們對今年光電銷售的零售預期沒有改變。您認為這可能成為推動零售電視市場和 24 年玻璃銷售上漲的新催化劑嗎？

That's a great question. They're relatively recent, and we're still in the midst of trying to understand how that will play out when it hits the consumer. Our expectations have been for China retail demand to be relatively muted this year. You're right to point it out, we're just a little early in being able to analyze and predict what its impact will be like. We'll get back to you on that as our understanding evolves.

這是一個很好的問題。它們是相對較新的，我們仍在嘗試了解當它到達消費者手中時會如何發揮作用。我們預計今年中國零售需求將相對疲軟。你指出這一點是對的，我們在分析和預測其影響方面還為時過早。隨著我們的理解不斷深入，我們會盡快回覆您。

Our next question comes from the line of Samik Chatterjee with JPMorgan.

我們的下一個問題來自 Samik Chatterjee 與摩根大通的對話。

Maybe to sort of ask you another one on display, just a bit more longer term. I know you have a strong position in the display market with the display glass, but traditionally or historically, the problem with this market has been the shorter cycle nature of the swings in the volume cycle. When you think about the duration of this current cycle, are you thinking about it any differently, how does the cycle track rate to some of the sort of volatility we've seen in the past? And then a bit more near term.

也許是想問你另一個正在展出的東西，只是時間更長。我知道你們在顯示器玻璃市場上擁有強大的地位，但從傳統或歷史上看，這個市場的問題是銷量週期波動的周期較短。當您考慮當前週期的持續時間時，您是否有不同的想法，該週期如何追蹤我們過去看到的某種波動率？然後是更近期的事。

I know you mentioned you're expecting a step up in terms of industry volume into 2Q. But any more color there because that does seem like 1Q panel maker utilization improved late in the quarter more than you expected. So how are you thinking about 2Q now based on the sort of stronger exit of 1Q?

我知道您提到您預計第二季度的行業數量將有所增加。但還有更多的顏色，因為第一季面板製造商的利用率似乎在本季末有所改善，超出了您的預期。那麼，基於第一季的強勁退出，您現在如何看待第二季？

Right, that's -- let me take the first question. That is a wonderful deep question, Samik, on the first one, mainly because as the locus of panel manufacturing has shifted from Korea, Taiwan, into China and that high concentration there has begun to lead to sort of different behavior between set makers and panel makers. One of the things that led to the sort of classic crystal cycles would be that, a, you had a very strongly growing market, which meant predicting how much capacity you would need was challenging because you had to get the rate right.

好的，那就是──讓我回答第一個問題。 Samik，關於第一個問題，這是一個很棒的深刻問題，主要是因為隨著面板製造的重地從韓國、台灣轉移到中國，那裡的高度集中已經開始導致電視機製造商和麵板之間的不同行為製造商。導致這種經典晶體週期的原因之一是，a，你有一個非常強勁成長的市場，這意味著預測你需要多少容量是具有挑戰性的，因為你必須獲得正確的速率。

But then the second was that set makers would tend to have very strong back half demand. Panel makers would tend to want to make it pretty consistently. And therefore, you have build ups of value chain inventory that added volatility to the markets. Two things have changed. First, we're now in the mature stage of the display market, at least until such time (inaudible) something like a very new format as displays start to move -- so that end market has become easier to predict. Second, what we're seeing with the behavior of the new very strong panel makers is they're seeking to optimize panel price, and they are reducing their utilization to match more closely with the actual orders from set makers. So this has begun to change that dynamic of how much inventory gets built up in the value chain.

但第二個問題是，佈景製造商往往有非常強勁的後半部需求。面板製造商往往希望使其保持一致。因此，價值鏈庫存的增加增加了市場的波動性。有兩件事發生了變化。首先，我們現在正處於顯示器市場的成熟階段，至少直到這樣的時候（聽不清楚）隨著顯示器開始移動，類似非常新的格式——因此終端市場變得更容易預測。其次，我們看到新的非常強大的面板製造商的行為是，他們正在尋求優化面板價格，並且他們正在減少利用率，以更緊密地匹配電視機製造商的實際訂單。因此，這已經開始改變價值鏈中庫存累積的動態。

Now this has only been a couple of quarters, a couple of 3 quarters. And so it's too early to tell is this going to be a more longer-term change. If it is a longer-term change, that will reflect well on the health of the industry and the smoothing out of these cycles that you are pointing out. The pandemic was sort of a mega cycle, and we're sort of still dealing with some of the things that happened during that period. So that may be more color than you're looking for, Samik, but it is a question upon which obviously we're pondering.

現在才過了幾個季度，幾個三個季度。因此，現在判斷這是否會是一個更長期的變化還為時過早。如果這是一個長期的變化，這將很好地反映行業的健康狀況以及您所指出的這些週期的平滑化。這場大流行是一個大周期，我們仍在處理那段時期發生的一些事情。因此，Samik，這可能比您想要的顏色更多，但這顯然是我們正在思考的問題。

And any thoughts on 2Q, the step-up from 1Q, 2Q just given the exit run rate was higher in 1Q.

對第二季的任何想法，從第一季、第二季的提升來看，第一季的退出運行率更高。

Yes. Samik, as you articulate, panel maker utilization was low generally in Q1. We certainly saw a step-up towards the end of the quarter. We're expecting them to run at higher levels through the second quarter and really through the year because if retail is flat just to meet that flat unit demand, they would have to run at significantly higher levels for the remaining 3 quarters of the year to meet that demand. We're not guiding specific volume increase from Q1 to Q2, but I think it's pretty meaningful.

是的。 Samik，正如您所說，第一季面板製造商的利用率普遍較低。我們確實在本季末看到了成長。我們預計它們在第二季甚至全年都將保持在更高的水平，因為如果零售業表現平平只是為了滿足單位需求，那麼它們將不得不在今年剩餘的三個季度以顯著更高的水平運行才能實現這個目標。我們並沒有指導從第一季到第二季的具體交易量增加，但我認為這是非常有意義的。

Our next question comes from the line of Tim Long with Barclays.

我們的下一個問題來自巴克萊銀行的 Tim Long。

Thank you. Maybe just a 2 parter on the optical comms business. First, on the telco side, you talked about the inventory normalization, but there's also a lot of chatter out there and weakness given 5G hasn't seemed to work all that successfully to the telcos. So could you just talk about that business in the context of 5G isn't really successful and what that means for some of these longer-term contracts that you have with some of the larger players?

謝謝。也許只是光通訊業務的兩個合作夥伴。首先，在電信公司方面，您談到了庫存正常化，但鑑於 5G 似乎對電信公司來說似乎並沒有那麼成功，因此也存在著許多爭論和弱點。那麼您能否談談 5G 背景下的業務並不真正成功，這對於您與一些較大的參與者簽訂的一些長期合約意味著什麼？

And then secondly, on the enterprise side, could you just touch on the opportunity for a lot of chatter about GPUs kind of chasing where there happens to be spare capacity for energy. Do you see an opportunity for your enterprise business with large data centers popping up in new areas that will need to be connected?

其次，在企業方面，您能否談談關於 GPU 追逐恰好有閒置能源容量的大量討論的機會。您是否認為大型資料中心出現在需要連線的新領域將為您的企業業務帶來機會？

Thank you, Tim. On the 5G piece, I think that the challenge that our customers in telco have faced is that 5G, you move from a technology in 4G, which wireless is very wireless, right, to 5G, which, therefore, takes wireless and starts to make it more wireline. And therefore, taking a good amount of infrastructure to put in place. Now interestingly, what they've taken advantage of is if they're going to do that, you see them combining their networks from wireline and wireless into one. And that allows them some significant cost savings and offers many different potential revenue opportunities for a given deployment of network. Now -- so in a way, you're seeing their cost productivity improve, their ability to serve improve. There is a challenge of how much revenue -- incremental revenue the 5G at this stage has generated, and that is something they have wrestled with.

謝謝你，提姆。在 5G 方面，我認為我們電信客戶面臨的挑戰是 5G，從 4G 技術（無線技術非常無線，對吧）轉向 5G，因此，5G 技術採用無線技術，並開始使它更多是有線的。因此，需要建立大量的基礎設施。有趣的是，他們所利用的是，如果他們打算這樣做，你會看到他們將有線和無線網路合而為一。這使他們能夠顯著節省成本，並為給定的網路部署提供許多不同的潛在收入機會。現在，從某種程度上來說，您會看到他們的成本生產力提高了，服務能力也提高了。一個挑戰是現階段5G產生了多少收入——增量收入，這是他們一直在努力解決的問題。

What you see reflected in our thoughts for the year is a relatively muted deployment outlook. But we'll still see the pickup because what's pushing us below sort of long-term deployment rates of fiber has been eating through the inventory largely purchased during the pandemic and dealing with that step-up. And then -- but it does incorporate a lower deployment outlook. So that's what we've sought to do for that, Tim. Does that address your question on that piece?

您在我們今年的想法中看到的是相對溫和的部署前景。但我們仍然會看到這種回升，因為推動我們低於長期光纖部署率的因素一直在消耗大流行期間購買的庫存並應對這種增加。然後——但它確實包含了較低的部署前景。這就是我們想要做的事情，提姆。這是否解決了您關於那篇文章的問題？

Yes, yes. And then just on the data centers popping up in other places impact?

是的是的。然後只是對其他地方出現的資料中心產生影響嗎？

The answer to your question is yes. It is an interesting opportunity. And it is -- coming back to [enhancing], hey, capability we have that others don't, which is this ability for us to actually respond globally across a really big geographic footprint, not only in the U.S. but across the globe. Because this search for energy is more than just finding the exact right communities here. And so yes, it does offer a significant opportunity for us for both innovation as well as volume. But it's too early to factor that in because they haven't found all the energy sources yet that will be required, and they're still dealing with the infrastructure ramifications therein.

你的問題的答案是肯定的。這是一個有趣的機會。回到[增強]，嘿，我們擁有其他人沒有的能力，這就是我們在全球範圍內真正做出反應的能力，不僅在美國，而且在全球範圍內。因為對能源的探索不僅僅是在這裡找到合適的社區。是的，它確實為我們的創新和產量提供了重要的機會。但現在考慮這一點還為時過早，因為他們還沒有找到所需的所有能源，而且他們仍在處理其中的基礎設施影響。

Our next question comes from the line of Asiya Merchant with Citi.

我們的下一個問題來自花旗銀行的 Asiya Merchant 線路。

Great. And apologies if this question has been answered. But I did notice inventory was a little higher this quarter and OpEx tracked a little bit higher as well. Just if you can provide some clarity on that.

偉大的。如果這個問題得到解答，我們深表歉意。但我確實注意到本季庫存略高，營運支出也略高。只要你能澄清這一點就好了。

Sure. Thanks, Asiya. On inventory, just think of it as we had a very low volume quarter in general. Our volume will go up through the year. So we still view inventory as an opportunity to take it down from the level we're at and we think that will be a catalyst for cash flow in 2024. With respect to OpEx, I'm going to answer your question, but I'm going to reframe it a little bit as well.

當然。謝謝，阿西婭。在庫存方面，只需考慮一下，因為我們的季度銷售總體上非常低。我們的銷量全年都會增加。因此，我們仍然將庫存視為將其從目前水平降低的機會，我們認為這將成為 2024 年現金流的催化劑。 。

So sequentially, our OpEx was up. The simplest way to think about it is that our variable compensation in '23 was lower than normal because we didn't perform to target in 2023, so we just didn't pay out at target. We've reset our targets, we expect to perform in 2024. So our variable compensation is at a normal level. But what I think is important to take away on OpEx is we are committed to keep our OpEx relatively flat to where it is. It will move around in any given quarter. It's -- I think we're -- we were about $700 million in the first quarter. It could be in the $700 million to $725 million range. But if we're able to do that over time, it creates another leverage point for us as our sales grow, and that's why we talk about powerful incrementals, gross margin expands and operating margin expands as well where profitability expands more than sales. So I feel good about OpEx overall.

因此，我們的營運支出連續上升。最簡單的思考方式是，我們 23 年的可變薪酬低於正常水平，因為我們沒有達到 2023 年的目標，所以我們只是沒有按目標支付。我們重新設定了目標，預計在 2024 年實現。但我認為關於營運支出的重要一點是，我們致力於將營運支出維持在相對穩定的水平。它會在任何給定的季度內移動。我想我們第一季的營收約為 7 億美元。其金額可能在 7 億至 7.25 億美元之間。但如果我們能夠隨著時間的推移做到這一點，隨著我們的銷售額成長，它會為我們創造另一個槓桿點，這就是為什麼我們談論強大的增量、毛利率擴張和營業利潤率擴張以及獲利能力擴張超過銷售額的原因。所以我對營運支出整體感覺良好。

Well, I was just going to ask, I know there was commentary on yen earlier, but investors have been asking when Corning would feel comfortable sharing sort of the new yen hedges. And perhaps this question has already been answered, but I did join late, so apologies if this is a repetitive question. But any color on this.

好吧，我只是想問，我知道早些時候有關於日元的評論，但投資者一直在問康寧何時願意分享新的日元對沖。也許這個問題已經得到了回答，但我確實加入得很晚，所以如果這是一個重複的問題，我深表歉意。但任何顏色都可以。

Yes. No apologies necessary, Asiya. Yes, what I shared earlier was the most important thing is to think about the return we generate in this business, our goal is to generate an appropriate return. You could think of that as what we will deliver in 2024 or what we delivered in 2023. And we're going to use yen hedging and raising price in combination to generate that economics or those economics to generate that return.

是的。沒必要道歉，阿西亞。是的，我剛才分享的最重要的是要考慮我們在這個業務中產生的回報，我們的目標是產生適當的回報。你可以將其視為我們將在 2024 年或 2023 年交付的產品。

And so we have made progress on our hedges. We've made some nice progress, and we'll be opportunistic throughout the year, and we'll look to hedge at attractive rates. We're not sort of discussing the details. And I think it's too early to think about how to frame up core rate for 2025. So we'll keep you posted on that. But just think of it as the overall profitability level or cash generation level in the display business.

因此，我們在對沖方面取得了進展。我們已經取得了一些不錯的進展，我們將全年保持機會主義，並且我們將尋求以有吸引力的利率進行對沖。我們不打算討論細節。我認為現在考慮如何制定 2025 年核心利率還為時過早。但只需將其視為顯示器業務的整體盈利水平或現金生成水平即可。

Our next question comes from the line of Joshua Spector with UBS.

我們的下一個問題來自瑞銀集團 (UBS) 的約書亞·斯佩克特 (Joshua Spector)。

Congrats on a solid quarter. This is James Cannon on for Josh. I just wanted to poke on the powerful incrementals you described. We're talking about a $3 billion sales opportunity. I mean if I look back at kind of last couple of quarters, your gross margin has held in pretty steady despite sales declining. I think there's some noise with display pricing coming through. Can you just give me some color as to how we should think about the cadence of gross margins as we go through the rest of the year?

恭喜季度業績穩健。我是詹姆斯·坎農 (James Cannon) 替約什 (Josh) 發言。我只是想探討一下你所描述的強大的增量。我們談論的是 30 億美元的銷售機會。我的意思是，如果我回顧過去幾個季度，儘管銷售額下降，但你們的毛利率仍然相當穩定。我認為顯示定價方面存在一些噪音。您能否告訴我一些關於我們在今年剩餘時間裡應該如何考慮毛利率節奏的資訊？

Yes. Thanks for the question. I think the way to think about it is if you go back to Q2 of -- I'm sorry, Q4 of 2022, that was our low point. We've expanded our gross margin 300 basis points while our sales have come down almost $400 million. We've done that by improving our productivity ratios, running our factories better and by raising price.

是的。謝謝你的提問。我認為思考這個問題的方法是，如果你回到 2022 年的第二季度——對不起，2022 年的第四季度，那是我們的最低點。我們的毛利率提高了 300 個基點，而銷售額卻下降了近 4 億美元。我們透過提高生產力、更好地營運工廠以及提高價格來做到這一點。

So we're actually at a very nice baseline of 37%. And I'd remind you that 37% is closer to 39% when you think about the old map before we absorb inflation and raised price, right? So we're starting from a very nice base and we have the capacity in place to support a lot higher sales, which is not normally the way we would grow. So as sales come back, we would expect our gross margin to march up along with those sales nicely each quarter. And then I mentioned just before, we also believe OpEx are on the operating margin line is another leverage point for us. So that's how we think about those powerful incrementals. I think you should just think of it as we will march up as our sales grow from 37%.

所以我們實際上處於 37% 的非常好的基線。我想提醒您，在我們吸收通貨膨脹和提高價格之前，當您考慮舊地圖時，37% 更接近 39%，對吧？因此，我們從一個非常好的基礎開始，我們有能力支持更高的銷售額，這通常不是我們成長的方式。因此，隨著銷售額的回升，我們預計每季的毛利率都會隨著銷售額的成長而大幅成長。我之前提到過，我們也認為營運成本處於營業利潤線上是我們的另一個槓桿點。這就是我們如何看待這些強大的增量。我想你應該想想，隨著我們的銷售額從 37% 成長，我們將會繼續前進。

Okay. I guess just another way to think about it is, as that $3 billion comes through, like I think 40 has typically been your target. Like has that changed? Or is that where you think -- that's where you think you can get to?

好的。我想另一種思考方式是，隨著 30 億美元的實現，就像我認為 40 美元通常是你的目標一樣。就像那改變了嗎？還是你認為那是你認為你能到達的地方？

Yes. So I think we can get there. But just as a reminder, the 40, if you go back in time, we've absorbed a significant amount of inflation and raised price, which brings our margin percentage down. So 38% is sort of the new 40% in old math. But I still think despite that new base, we can get back to that 40% level as we accrete our sales up.

是的。所以我認為我們可以到達那裡。但提醒一下，如果你回顧過去，40 年來我們已經吸收了大量的通貨膨脹並提高了價格，這導致我們的利潤率下降。所以 38% 有點像舊數學的新 40%。但我仍然認為，儘管有了新的基礎，隨著銷售額的增加，我們仍可以回到 40% 的水平。

Our next question comes from the line of Steven Fox with Fox Advisors.

我們的下一個問題來自福克斯顧問公司的史蒂文·福克斯。

I guess I was just wondering on the Specialty Materials business, if you can provide some more detail. From my seat, it looks like it did much better than I would have thought for Q1. How much of that was due to Gorilla Glass? How do you sort of look at the rest of the year, given sort of mixed results in Q1 on the phone side, like what kind of seasonality, et cetera, are we looking at?

我想我只是想知道特種材料業務，如果您能提供更多細節。從我的角度來看，第一季的表現似乎比我想像的要好得多。其中有多少是因為大猩猩玻璃造成的？鑑於第一季手機的結果好壞參半，例如我們正在關注什麼樣的季節性等等，您如何看待今年剩餘時間？

Yes. I think it was more or less in line with how we would have expected it. I think it's a business that will grow as we add more Corning content. That's the way we think about it for the year. We don't see smartphone market being up that much in units maybe a point or 2 for the year. There certainly can be some growth in the IT space, but even that is single digit, maybe mid-single-digit level.

是的。我認為這或多或少符合我們的預期。我認為隨著我們添加更多康寧內容，這項業務將會成長。這就是我們今年的思考方式。我們認為今年智慧型手機市場的單位數量不會增加那麼多，可能會增加一兩個百分點。 IT 領域肯定會出現一些成長，但即使是個位數，也可能是中個位數水準。

So I think the growth catalyst here is for us to add content into the market.

所以我認為這裡的成長催化劑是我們在市場上添加內容。

And we just don't see a lot of that happening this year. Steve, we'll be -- this is most of our newest innovation will be aimed at the model year following this. So we're not looking at MC as being a big catalyst for near-term growth in terms of versus Q1, right, for this year, but future it will be.

今年我們並沒有看到很多這樣的事情發生。史蒂夫，我們將 - 這是我們大部分最新的創新將針對隨後的車型年。因此，我們並不認為 MC 是今年與第一季相比近期成長的重要催化劑，但未來將會如此。

Super. We've got time for another question.

極好的。我們還有時間回答另一個問題。

Our next question comes from the line of George Notter with Jefferies.

我們的下一個問題來自喬治·諾特和傑弗里斯的對話。

I guess I'm curious about your comments on display. I think you mentioned an appropriate level of profitability. I get what that is. But when you go out and re-up the hedging portfolio, obviously, there's a cost that comes with that. Do you still -- I think if I go back in the past, you guys looked at the hedging portfolio as being pretty neutral in terms of cost between what you were long and what you were short. Is that still going to be the case as we re-up the hedges going forward? And then when you talk about an appropriate level of profitability, are you including the cost of the hedging program when you make that statement?

我想我對你所展示的評論感到好奇。我認為你提到了適當的獲利水準。我明白那是什麼了。但當你出去重新增加對沖投資組合時，顯然，隨之而來的是成本。我想如果我回到過去，你們仍然認為對沖投資組合在多頭和空頭之間的成本方面相當中性。當我們未來重新加強對沖時，情況還會如此嗎？然後，當您談論適當的盈利水平時，您在發表聲明時是否包括對沖計劃的成本？

The appropriate level of profitability would include any cost of hedging. We're long yen, right? And so the -- you heard, and Ed was pointing out sort of over the sweep of time, we generated on the order of $2.5 billion of cash, positive cash arising from our hedges, right? That or us hedging that long end position. And the way we think about this is that position is coming from the fact we sell in yen. And so we will resolve this either in the currency market should the yen come back to more sort of reasonable levels, right? And we'll be opportunistic about that.

適當的獲利水準將包括任何對沖成本。我們做多日元，對嗎？所以——你聽說了，艾德指出，在一段時間內，我們產生了大約 25 億美元的現金，來自我們的對沖的正現金，對嗎？或者我們對沖長期部位。我們的想法是，這個部位來自於我們以日圓出售的事實。因此，如果日圓回到更合理的水平，我們將在貨幣市場上解決這個問題，對嗎？我們將對此採取機會主義態度。

But if not, our customers are picking up the game in terms of lower-cost glass because we sell in yen. And so what we will do is just raise our price in yen to share some of that volatility that we're seeing in the yen. Does that make sense, George?

但如果沒有，我們的客戶就會選擇低成本玻璃，因為我們以日圓銷售。因此，我們要做的就是提高日圓價格，以分擔日圓的一些波動。這樣有道理嗎，喬治？

It does. I assume it's still fair to say that the cost of the hedging program is pretty minimal to shareholders, we're pretty balanced in terms of the 2 sides.

確實如此。我認為可以公平地說，對沖計劃的成本對股東來說相當小，我們在兩方面都相當平衡。

Yes.

是的。

Thanks, George, and thank you, everybody, for joining us today. Before we close, I wanted to let you know that we will hold our Annual Meeting of Shareholders on May 2. In addition, we'll also attend the JPMorgan Technology Conference on May 21. And finally, we'll be hosting management visits to investor offices in [select cities].

謝謝喬治，也謝謝大家今天加入我們。在結束之前，我想告訴您，我們將於 5 月 2 日舉行股東年會。的投資者辦事處。

There'll be a web replay of today's call on our site starting later this morning. Thank you all for joining us. Shannon, that concludes our call. Please disconnect all lines.

從今天上午晚些時候開始，我們的網站上將重播今天的電話會議。感謝大家加入我們。香農，我們的通話到此結束。請斷開所有線路。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。