康寧 (GLW) 2020 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Corning Incorporated Second Quarter 2020 Earnings Conference Call.

女士們，先生們，感謝你們的支持，歡迎來到康寧公司 2020 年第二季度收益電話會議。

(Operator Instructions) I would now like to hand the conference to your speaker today, Ann Nicholson, Vice President of Investor Relations.

（操作員說明）我現在想將會議交給您今天的發言人，投資者關係副總裁 Ann Nicholson。

Please go ahead, ma'am.

請繼續，女士。

Thank you, Joelle, and good morning.

謝謝你，Joelle，早上好。

Welcome to Corning's Second Quarter 2020 Earnings Call.

歡迎來到康寧 2020 年第二季度財報電話會議。

With me today are Wendell Weeks, Chairman and Chief Executive Officer; Tony Tripeny, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer.

今天和我在一起的是董事長兼首席執行官 Wendell Weeks； Tony Tripeny，執行副總裁兼首席財務官；和執行副總裁兼首席戰略官 Jeff Evenson。

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.

我想提醒您，今天的言論包含前瞻性陳述，屬於 1995 年《私人證券訴訟改革法案》的含義。

Those statements involve risks, uncertainties and other factors that could cause actual results to differ materially.

這些陳述涉及風險、不確定性和其他可能導致實際結果大不相同的因素。

These factors are detailed in the company's financial reports.

這些因素在公司的財務報告中有詳細說明。

You should also note that we will be discussing our consolidated results using core performance measures, unless we specifically indicate our comments relate to GAAP data.

您還應該注意，除非我們特別指出我們的評論與 GAAP 數據相關，否則我們將使用核心績效指標來討論我們的綜合結果。

Our core performance measures are non-GAAP measures used by management to analyze the business.

我們的核心績效指標是管理層用來分析業務的非 GAAP 指標。

Reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at corning.com.

可以在我們網站 corning.com 的投資者關係部分找到核心結果與可比較的 GAAP 值的對賬。

You may also access core results on our website with downloadable financials in the interactive analyst center.

您還可以在我們的網站上訪問核心結果，並在交互式分析師中心使用可下載的財務數據。

Supporting slides are being shown live on our webcast.

支持幻燈片正在我們的網絡廣播中實時顯示。

We encourage you to follow along, and they're also available on our website for downloading.

我們鼓勵您跟隨，它們也可以在我們的網站上下載。

Now I'll turn the call over to Wendell.

現在我把電話轉給溫德爾。

Thank you, Ann, and good morning, everyone.

謝謝你，安，大家早上好。

This morning, we reported second quarter 2020 results.

今天早上，我們報告了 2020 年第二季度的業績。

Sales were $2.6 billion.

銷售額為 26 億美元。

Net income was $218 million, EPS was $0.25, and free cash flow was $285 million.

淨收入為 2.18 億美元，每股收益為 0.25 美元，自由現金流為 2.85 億美元。

All increased sequentially.

都依次遞增。

I have 2 primary observations on the quarter.

我對本季度有 2 個主要觀察結果。

First, we're effectively adjusting to this period of uncertainty with decisive action and operational execution.

首先，我們通過果斷的行動和運營執行有效地適應了這段不確定時期。

We're generating positive cash flow and maintaining a strong balance sheet.

我們正在產生正現金流並保持強勁的資產負債表。

Second, even in these uncertain times, our strategy to deliver for our customers and outperform our markets is working.

其次，即使在這些不確定的時期，我們為客戶提供服務並超越市場的戰略仍在發揮作用。

We're continuing to lead in the capabilities that make Corning distinctive.

我們將繼續在使康寧與眾不同的能力方面處於領先地位。

In fact, we advanced multiple growth initiatives during the quarter.

事實上，我們在本季度推進了多項增長計劃。

Let's consider the first observation in more detail.

讓我們更詳細地考慮第一個觀察結果。

In the second quarter, we completed adjustments to our operating plan and continued to execute across the board by delivering operational improvements that will generate significant cost savings through 2021.

在第二季度，我們完成了對運營計劃的調整，並通過提供運營改進繼續全面執行，這些改進將在 2021 年之前產生顯著的成本節約。

We delivered sequential growth in sales, EPS and free cash flow.

我們實現了銷售額、每股收益和自由現金流的環比增長。

We also completed the vast majority of our anticipated restructuring, including the reprioritization of R&D programs.

我們還完成了絕大多數預期的重組，包括重新確定研發項目的優先級。

We believe we're continuing to position Corning for strong long-term growth and improved profitability.

我們相信，我們將繼續定位康寧，以實現強勁的長期增長和提高盈利能力。

Turning to my second observation.

轉向我的第二個觀察。

Our long-term strategy is sound and our growth drivers are intact.

我們的長期戰略是正確的，我們的增長動力是完整的。

As I've said before, we're not just counting on everybody buying more stuff.

正如我之前所說，我們不僅僅指望每個人都購買更多東西。

We're putting more Corning into the products that people already buy.

我們在人們已經購買的產品中加入了更多的康寧。

This provides a mechanism for us to outperform our end markets even in challenging environments.

這為我們提供了一種機制，即使在充滿挑戰的環境中也能超越我們的終端市場。

The relevance of our focused and cohesive portfolio remain strong and is actually increasing.

我們專注且有凝聚力的投資組合的相關性仍然很強，而且實際上還在增加。

Some of the secular trends benefiting us could accelerate as consumer lifestyles continue to adapt in a world with social distancing and as health care companies advance solutions to end the pandemic.

隨著消費者生活方式在社會疏遠的世界中繼續適應，以及隨著醫療保健公司推進結束大流行的解決方案，一些有利於我們的長期趨勢可能會加速。

There is a need for expanded network capacity and ubiquitous displays as people spend more time online.

隨著人們花更多的時間上網，需要擴展網絡容量和無處不在的顯示器。

Safe widespread delivery of vaccines are among society's top priorities, and reduced fine particulate pollution appears to be helpful for reducing infection rates.

安全廣泛地提供疫苗是社會的首要任務之一，減少細顆粒物污染似乎有助於降低感染率。

All these needs fall directly within Corning's mission of improving lives through innovation, and we are well positioned to contribute.

所有這些需求都直接屬於康寧通過創新改善生活的使命，我們有能力做出貢獻。

The progress we've made and the leadership position we leveraged across our markets in the second quarter speaks for itself.

我們取得的進展以及我們在第二季度在市場上發揮的領導地位不言而喻。

Let's take a closer look.

讓我們仔細看看。

In Life Sciences, we're mobilizing our capabilities to combat the virus wherever we can.

在生命科學領域，我們正在竭盡所能調動我們的能力來抗擊病毒。

Glass packaging is critical to the COVID-19 vaccine effort, and it is currently in short supply.

玻璃包裝對 COVID-19 疫苗的研發至關重要，目前供不應求。

Our Valor Glass innovation helps enable faster filling line speeds and increased patient safety.

我們的 Valor Glass 創新有助於加快灌裝線速度並提高患者安全性。

Valor Glass was selected by the U.S. Department of Health & Human Services and the Department of Defense to accelerate delivery of COVID-19 vaccines, and Corning was awarded $204 million in funding to expand Valor manufacturing capacity.

Valor Glass 被美國衛生與公眾服務部和國防部選中以加速 COVID-19 疫苗的交付，康寧獲得了 2.04 億美元的資金用於擴大 Valor 的製造能力。

3 leading COVID-19 vaccine producers have entered supply agreements for Valor Glass.

3 家領先的 COVID-19 疫苗生產商已與 Valor Glass 簽訂供應協議。

And we're also working with several other potential customers to capture additional opportunities.

我們還與其他幾個潛在客戶合作，以抓住更多機會。

Additionally, we announced a long-term supply agreement with Pfizer to provide Valor Glass for currently marketed drugs in their portfolio.

此外，我們還宣布了與輝瑞公司的長期供應協議，為其產品組合中目前上市的藥物提供 Valor Glass。

Our Life Sciences segment entered several long-term agreements with major customers for COVID-19 molecular diagnostic testing and antibody detection kits in quarter 2. We're seeing strong demand for these products currently, and we expect to accelerate shipments further in the second half.

我們的生命科學部門在第二季度與主要客戶就 COVID-19 分子診斷測試和抗體檢測試劑盒達成了幾項長期協議。我們目前看到對這些產品的強勁需求，我們預計下半年將進一步加快出貨速度.

In Mobile Consumer Electronics, our Specialty Materials segment delivered 13% year-over-year sales growth while the smartphone market declined year-over-year.

在移動消費電子產品中，我們的特種材料部門銷售額同比增長 13%，而智能手機市場同比下降。

Our performance was driven by strong demand for premium products, and we announced 2 exciting milestones.

我們的業績是由對優質產品的強勁需求推動的，我們宣布了 2 個激動人心的里程碑。

Gorilla Glass has now been used on more than 8 billion devices worldwide.

大猩猩玻璃現已在全球超過 80 億台設備上使用。

And we maintained our industry leadership with the launch of Gorilla Glass Victus.

我們通過推出 Gorilla Glass Victus 保持了行業領先地位。

This is the toughest Gorilla Glass yet and features significantly better drop and scratch performance than any other Gorilla Glass or competitive glass from other manufacturers.

這是迄今為止最堅韌的大猩猩玻璃，並且具有比任何其他大猩猩玻璃或其他製造商的競爭玻璃更好的跌落和劃傷性能。

Samsung will be the first customer to adopt Gorilla Glass Victus in the near future.

在不久的將來，三星將成為第一個採用大猩猩玻璃 Victus 的客戶。

In Automotive, our Environmental Technologies segment outperformed in a weak market.

在汽車領域，我們的環境技術部門在疲軟的市場中表現出色。

Strong adoption of our gasoline particulate filters continued, driving their sales growth to more than 20% year-over-year.

我們的汽油微粒過濾器繼續得到廣泛採用，推動其銷售額同比增長超過 20%。

Turning to Optical Communications.

轉向光通信。

Corning grew sales 12% sequentially, driven by carrier network projects.

在運營商網絡項目的推動下，康寧銷售額環比增長 12%。

We announced a collaboration with EnerSys to speed 5G deployment by simplifying the delivery of fiber and electrical power to small-cell wireless sites.

我們宣布與 EnerSys 合作，通過簡化向小型蜂窩無線站點的光纖和電力傳輸來加速 5G 部署。

We also announced that we're working with Qualcomm Technologies to deliver indoor networks that are 5G ready, easy to install and affordable.

我們還宣布，我們正在與 Qualcomm Technologies 合作，提供 5G 就緒、易於安裝且價格合理的室內網絡。

The Corning systems are expected to be among the first designed to deliver 5G and our capability over millimeter wave spectrum in the indoor segment.

康寧系統預計將成為首批設計用於提供 5G 和我們在室內段的毫米波頻譜能力的系統之一。

This includes enterprises such as offices, university campuses, hospitals, hotels, retail outlets and more.

這包括辦公室、大學校園、醫院、酒店、零售店等企業。

Our collaboration will enable a small footprint and low-power consumption platform for true high-bandwidth 5G for in-building networks.

我們的合作將為室內網絡的真正高帶寬 5G 打造一個佔地面積小、功耗低的平台。

Customer deployment will begin in the fall.

客戶部署將於秋季開始。

In Display, Corning generated consistent sequential net income as customer demand remained steady.

在顯示器方面，由於客戶需求保持穩定，康寧產生了穩定的連續淨收入。

And large screen TV sales continue to drive demand, supporting the opening of our Gen 10.5 facilities.

大屏幕電視的銷售繼續推動需求，支持我們 Gen 10.5 設施的開放。

Across our markets, you can see that we're successfully advancing our long-term growth initiatives.

在我們的市場中，您可以看到我們正在成功推進我們的長期增長計劃。

Additionally, near-term market conditions have improved.

此外，近期市場狀況有所改善。

Auto factories are resuming operations in North America and Europe.

北美和歐洲的汽車工廠正在恢復運營。

And auto sales in China have returned to pre-pandemic levels.

中國的汽車銷量已恢復到大流行前的水平。

Telecommunication service providers and data center operators have resumed sending their technicians into the field, and they're rethinking their network needs to address greater demand for their services.

電信服務提供商和數據中心運營商已經恢復派遣技術人員到現場，他們正在重新考慮他們的網絡需求，以滿足對他們服務的更大需求。

Life Science labs are slowly reopening.

生命科學實驗室正在慢慢重新開放。

We also expect television demand to remain resilient as in-home entertainment is more important than ever.

我們還預計電視需求將保持彈性，因為家庭娛樂比以往任何時候都更加重要。

And the demand for computing devices will be boosted by work and learn from home.

在家工作和學習將推動對計算設備的需求。

So we're seeing some encouraging developments across our industries.

因此，我們看到整個行業都出現了一些令人鼓舞的發展。

On the other hand, disruptive forces from the pandemic, the civil unrest, to a worldwide recession and geopolitical struggles all remain in play, and they create uncertainty.

另一方面，從大流行病、內亂到全球經濟衰退和地緣政治鬥爭的破壞性力量仍在發揮作用，它們造成了不確定性。

We are united as a company to remain vigilant and adapt appropriately.

作為一家公司，我們團結一致，保持警惕並適當適應。

We're rising to the challenge.

我們正在迎接挑戰。

I'll now turn the call over to Tony so he can give you some more detail on our quarter and our near-term outlook.

我現在將電話轉給托尼，以便他可以為您提供有關我們季度和近期前景的更多詳細信息。

Thank you, Wendell, and good morning.

謝謝你，溫德爾，早上好。

We came into this economic downturn with a balance sheet built for times like these, and we took actions during the quarter to ensure we have the financial resources needed for the duration.

面對經濟衰退，我們的資產負債表是為這樣的時期而建立的，我們在本季度採取了行動，以確保我們擁有在此期間所需的財務資源。

We generated $285 million in free cash flow, exited the quarter with $2.2 billion in cash and are on track to generate positive free cash flow for the year.

我們產生了 2.85 億美元的自由現金流，以 22 億美元的現金退出本季度，並有望在本年度產生正的自由現金流。

Our financial position is strong.

我們的財務狀況良好。

We are becoming more efficient, and we have the capacity in place to meet expected growth with minimal investment.

我們正在變得更有效率，我們有能力以最少的投資滿足預期的增長。

We expect improved profitability and return on invested capital as we grow sales.

隨著銷售額的增長，我們預計盈利能力和投資資本回報率會有所提高。

As the quarter progressed, demand and visibility improved.

隨著本季度的進展，需求和知名度有所改善。

We maintained our leadership across all of our market access platforms.

我們在所有市場准入平台上保持領先地位。

As a result, we expect to grow sales and profits in the third quarter.

因此，我們預計第三季度的銷售額和利潤將增長。

As we said on our first quarter call, we've made aggressive adjustments to align our cost and operating plan with the lower anticipated sales.

正如我們在第一季度電話會議上所說，我們已經進行了積極的調整，以使我們的成本和運營計劃與較低的預期銷售額保持一致。

These actions were essentially completed in the second quarter and fall into 4 broad categories: reducing production levels across most of our businesses; adjusting operating expenses, with the majority of the savings to be realized in the second half; modifying inventory plans; and reducing capital expenditures.

這些行動在第二季度基本完成，分為四大類：降低我們大部分業務的生產水平；調整運營費用，大部分節餘將在下半年實現；修改庫存計劃；並減少資本支出。

As a result, we expect $200 million in annualized cash savings.

因此，我們預計每年可節省 2 億美元的現金。

We reduced inventory by $120 million in the second quarter, and we reduced our CapEx by half versus Q1 to $288 million.

我們在第二季度減少了 1.2 億美元的庫存，與第一季度相比，我們將資本支出減少了一半，達到 2.88 億美元。

We expect Q3 and Q4 CapEx to be consistent with the second quarter.

我們預計第三季度和第四季度的資本支出將與第二季度保持一致。

We had strong operational performance with sequential improvement in sales, net income, EPS and free cash flow.

我們的經營業績強勁，銷售額、淨收入、每股收益和自由現金流均有所改善。

Second quarter sales were $2.6 billion, up 2% quarter-over-quarter.

第二季度銷售額為 26 億美元，環比增長 2%。

Net income was $218 million, up 23% quarter-over-quarter.

淨收入為 2.18 億美元，環比增長 23%。

And EPS was $0.25, up 25% sequentially.

每股收益為 0.25 美元，環比增長 25%。

And free cash flow was $285 million.

自由現金流為 2.85 億美元。

Now before I get into further details of our performance and results, I want to note that the largest difference between our GAAP and core results stemmed from restructuring charges of $254 million, which was primarily noncash and included the reassessment and reprioritization of R&D programs.

現在，在我詳細介紹我們的業績和結果之前，我想指出，我們的 GAAP 和核心結果之間的最大差異源於 2.54 億美元的重組費用，這主要是非現金的，包括對研發項目的重新評估和重新排序。

Other differences between our GAAP and core results come from a noncash mark-to-market adjustment for our currency hedge contracts.

我們的 GAAP 和核心結果之間的其他差異來自我們貨幣對沖合約的非現金按市值調整。

With respect to mark-to-market adjustments, GAAP accounting requires earning translations, hedge contracts and foreign debt settling in future periods to be mark-to-market and recorded at current value at the end of each quarter even though those contracts will not be settled in the current quarter.

關於按市值調整，公認會計原則會計要求未來期間的收益換算、對沖合同和外債結算按市值計價並在每個季度末按現值記錄，即使這些合同不會結算在本季度。

To be clear, this mark-to-market accounting has no impact on our cash flow.

需要明確的是，這種按市值計價的會計方法對我們的現金流沒有影響。

Our currency hedges protect us economically from foreign exchange rate fluctuations and provide higher certainty for our earnings and cash flow, our ability to invest for growth and our future shareholder distributions.

我們的貨幣對沖保護我們在經濟上免受匯率波動的影響，並為我們的收益和現金流、我們為增長而投資的能力以及我們未來的股東分配提供更高的確定性。

Our non-GAAP or core results provide additional transparency into operations by using a constant currency rate aligned with the economics of our underlying transactions.

我們的非 GAAP 或核心結果通過使用與我們的基礎交易的經濟狀況相一致的恆定匯率，為運營提供了額外的透明度。

So we're very pleased with our hedging program and the economic certainty it provides.

因此，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。

We've received $1.7 billion in cash under our hedge contracts since their inception more than 5 years ago.

自 5 年多前成立以來，我們根據對沖合同收到了 17 億美元的現金。

Now let's review the business segments.

現在讓我們回顧一下業務部門。

In Display Technologies, second quarter sales were $753 million and net income was $152 million, both consistent with the first quarter.

Display Technologies 第二季度銷售額為 7.53 億美元，淨收入為 1.52 億美元，均與第一季度持平。

The Display glass volume grew by a low single-digit percentage sequentially as our Gen 10.5 customers bought more glass.

隨著我們的 Gen 10.5 客戶購買了更多玻璃，顯示器玻璃銷量連續以個位數百分比增長。

Sequential price declines were moderate and as expected.

連續的價格下跌是適度的，符合預期。

As Wendell said, we expect that television demand will remain resilient as in-home entertainment is more important than ever and that demand for IT products will be boosted by work and steady-from-home trends.

正如 Wendell 所說，我們預計電視需求將保持彈性，因為家庭娛樂比以往任何時候都更加重要，而且對 IT 產品的需求將受到工作和穩定的居家趨勢的推動。

In the second quarter, worldwide TV sell-through units in Q2 increased slightly year-over-year, better than Q1 and better than the industry anticipated.

第二季度，Q2全球電視銷售量同比小幅增長，好於Q1，好於行業預期。

Additionally, demand for notebook PCs was strong in the second quarter.

此外，第二季度對筆記本電腦的需求強勁。

Preliminary retail sell-through data for June and July indicate that demand recovery in China has held and that demand in North America and Europe remains robust, while emerging regions remain weak.

6 月和 7 月的初步零售銷售數據表明，中國的需求復蘇已經持續，北美和歐洲的需求依然強勁，而新興地區仍然疲軟。

While uncertainty exists around retail demand in the back half of the year, we remain confident that TV screen size will continue to grow in 2020 and beyond.

儘管下半年零售需求存在不確定性，但我們仍然相信電視屏幕尺寸將在 2020 年及以後繼續增長。

TV's 65-inch or larger grew almost 40% year-over-year in the first half.

上半年，65 英寸或更大尺寸的電視同比增長近 40%。

And we are well positioned to capture the majority of that growth with Gen 10.5, which is the most efficient gen size for large TV manufacturing.

我們有能力通過 Gen 10.5 抓住大部分增長，這是大型電視製造的最有效的一代規模。

We continue to expect Display pricing to decline by a mid-single-digit percentage in 2020.

我們繼續預計 2020 年顯示屏定價將下降中個位數百分比。

We believe that 3 factors drive a favorable glass pricing environment: first, we expect glass supply to continue to be balanced to demand.

我們認為有 3 個因素推動了有利的玻璃定價環境：首先，我們預計玻璃供需將繼續保持平衡。

For Corning, we are aligning our capacity with demand.

對於康寧，我們正在使我們的產能與需求保持一致。

We are also pacing our Gen 10.5 capital projects to align with panel makers' schedules; second, our competitors continue to face profitability challenges at current pricing levels; and third, Display glass manufacturing requires periodic investments in existing capacity to maintain operations.

我們還在調整我們的 Gen 10.5 資本項目，以與面板製造商的時間表保持一致；其次，我們的競爭對手在當前定價水平下繼續面臨盈利挑戰；第三，顯示器玻璃製造需要對現有產能進行定期投資以維持運營。

Glass prices must support acceptable returns on those investments.

玻璃價格必須支持這些投資的可接受回報。

In Optical Communications, second quarter sales grew 12% sequentially to $887 million as major carriers increased spending on cable deployments and access network projects.

在光通信領域，由於主要運營商增加了電纜部署和接入網絡項目的支出，第二季度銷售額環比增長 12% 至 8.87 億美元。

Net income grew by $52 million to $81 million on the higher volume and actions taken to align cost and capacity.

淨收入增長了 5200 萬美元，達到 8100 萬美元，原因是產量增加以及為調整成本和產能而採取的行動。

The year-over-year decline in sales was consistent with the passive optical market decline.

銷售額的同比下降與無源光學市場的下滑一致。

We maintain our view that the long-term trend in optical is strongly positive.

我們仍然認為光學的長期趨勢是非常積極的。

Bandwidth demand has accelerated during the pandemic, consuming network headroom capacity.

帶寬需求在大流行期間加速，消耗了網絡淨空容量。

Evidence of that demand includes: AT&T's report that WiFi calling increased 100%; Verizon's report that VPN connections are up 72% over pre-COVID levels; and Zoom surpassing 300 million users from 10 million in December.

這種需求的證據包括：AT&T 的報告稱 WiFi 通話增加了 100%； Verizon 的報告稱，VPN 連接比 COVID 之前的水平增加了 72%； Zoom 用戶從 12 月的 1000 萬突破 3 億。

We expect carriers to expand capacity to meet growing bandwidth in the future, but the current environment makes timing uncertain.

我們預計運營商將擴大容量以滿足未來不斷增長的帶寬，但當前環境使時機不確定。

While network operators remain committed to their original capital plans for 2020, deployments are constrained by pandemic-related labor and site access constraints.

儘管網絡運營商仍致力於其 2020 年的原始資本計劃，但部署受到與大流行相關的勞動力和站點訪問限制的限制。

We expect these factors to continue in the third quarter.

我們預計這些因素將在第三季度繼續存在。

Environmental Technologies faced a challenging market.

Environmental Technologies 面臨著充滿挑戰的市場。

During the quarter, OEMs temporarily halted production in both the automotive and diesel markets.

本季度，原始設備製造商暫時停止了汽車和柴油市場的生產。

To mitigate the impact, we swiftly adjusted our operations to pace with customer demand and reduced costs.

為了減輕影響，我們迅速調整了我們的運營以適應客戶需求並降低成本。

Environmental Technologies' second quarter sales were $226 million and profitability was impacted by lower sales and production volumes.

Environmental Technologies 第二季度銷售額為 2.26 億美元，盈利能力受到銷量和產量下降的影響。

Our auto sales were down 31% year-over-year, beating the global auto production decline of 41 -- 45% year-over-year through continued adoption of gasoline particulate filters.

由於繼續採用汽油微粒過濾器，我們的汽車銷量同比下降 31%，超過了全球汽車產量 41% 的同比下降 45%。

The good news is that by the end of the quarter, auto sales in China returned to pre-lockdown levels, while North America and Europe OEMs began ramping production.

好消息是，到本季度末，中國的汽車銷量恢復到封鎖前的水平，而北美和歐洲的原始設備製造商開始增產。

In diesel, the anticipated cyclical downturn in North America heavy-duty truck market was made worse by shutdowns, with vehicle production dropping 73% year-over-year.

在柴油方面，北美重型卡車市場預期的周期性低迷因停產而變得更糟，汽車產量同比下降 73%。

Overall, we remain confident in our content and innovation-driven strategy in Environmental and expect to return to growth as markets improve through the second half and into next year.

總體而言，我們對我們在環境領域的內容和創新驅動戰略充滿信心，並預計隨著市場在下半年和明年的改善而恢復增長。

Specialty Materials sales were $417 million in the second quarter, up 13% year-over-year and in sharp contrast to the smartphone market, which declined year-over-year.

第二季度特種材料銷售額為 4.17 億美元，同比增長 13%，與智能手機市場的同比下降形成鮮明對比。

Net income was $90 million, up 34% year-over-year.

淨收入為 9000 萬美元，同比增長 34%。

Sales growth was driven by 3 factors: first, premium glass demand increased in support of second half customer launches; second, work and study-from-home trends drove growth in our products for tablets and laptops; and third, the demand for advanced chips drove sales for our semiconductor equipment products.

銷售增長由三個因素驅動：一是優質玻璃需求增加，支持下半年客戶投放；其次，在家工作和學習的趨勢推動了我們的平板電腦和筆記本電腦產品的增長；第三，對先進芯片的需求帶動了我們半導體設備產品的銷售。

Looking ahead, we expect our outperformance relative to the 2020 mobile consumer electronics market to come from further adoption of our innovations.

展望未來，我們預計我們相對於 2020 年移動消費電子市場的出色表現將來自我們創新的進一步採用。

In Life Sciences, second quarter sales declined 7% year-over-year to $243 million.

在生命科學領域，第二季度銷售額同比下降 7% 至 2.43 億美元。

Net income was $31 million, down $9 million versus last year, on the lower sales volume.

由於銷量下降，淨收入為 3100 萬美元，比去年減少 900 萬美元。

The business was impacted by the prolonged closure of nonessential laboratories, such as universes -- university research labs, particularly in the North American market.

該業務受到非必要實驗室長期關閉的影響，例如宇宙 - 大學研究實驗室，特別是在北美市場。

The impact has been somewhat offset by increased demand for consumables used in COVID-19 testing applications.

對 COVID-19 測試應用中使用的耗材的需求增加在一定程度上抵消了這種影響。

Life Science lab reopenings picked up in late May and lab utilization has been steadily increasing since then.

生命科學實驗室在 5 月下旬重新開放，此後實驗室利用率一直在穩步上升。

Going forward, we are confident in the opportunities ahead for Life Sciences and Valor, especially as we prepare for upcoming vaccine demand.

展望未來，我們對生命科學和 Valor 未來的機遇充滿信心，尤其是在我們為即將到來的疫苗需求做準備的時候。

Equity earnings were positively impacted in the second quarter as our Hemlock JV settled a contract with a solar customer.

由於我們的 Hemlock JV 與太陽能客戶簽訂了合同，第二季度的股票收益受到了積極影響。

Going forward, Hemlock will largely sell products in the semiconductor industry.

展望未來，Hemlock 將主要銷售半導體行業的產品。

Hemlock's leadership position is backed by attractive long-term take-or-pay customer contracts with upfront payments.

Hemlock 的領導地位得到了有吸引力的長期照付不議客戶合同的支持，並提供預付款。

This creates stable revenue and profits and strong cash flow generation.

這創造了穩定的收入和利潤以及強勁的現金流產生。

Let's move to the balance sheet and our commitment to strong financial stewardship.

讓我們轉向資產負債表和我們對強有力的財務管理的承諾。

We generated $285 million of free cash flow, a significant increase from the first quarter.

我們產生了 2.85 億美元的自由現金流，比第一季度有了顯著增長。

We have $2.2 billion of cash, and we have a debt structure that is conservative by design and relatively unique.

我們有 22 億美元的現金，我們的債務結構在設計上是保守的，而且相對獨特。

Our balance sheet is built for times like these.

我們的資產負債表是為這樣的時代而建立的。

Today, our average debt maturity is about 25 years, the longest in the S&P 500.

今天，我們的平均債務期限約為 25 年，是標準普爾 500 指數中最長的。

Over the next 18 months, we have under $70 million coming due.

在接下來的 18 個月裡，我們有不到 7000 萬美元到期。

Less than half of our total debt is due within the next 20 years.

我們的總債務中不到一半將在未來 20 年內到期。

And during this time, there is no single year with debt repayments over $500 million.

在此期間，沒有任何一年的債務償還超過 5 億美元。

Investors often evaluate credit and financial health based on total debt to EBITDA.

投資者通常根據 EBITDA 的總債務來評估信用和財務健康狀況。

For the S&P 500, the average company has a weighted average debt maturity of roughly 10 years, and more than 80% of debt is due within 20 years.

對於標準普爾 500 指數成分股公司，平均加權平均債務期限約為 10 年，超過 80% 的債務將在 20 年內到期。

Consequently, when investors calculate the debt to EBITDA, they are implicitly focusing mostly on debt due in the next 20 years.

因此，當投資者計算 EBITDA 的債務時，他們主要關注未來 20 年到期的債務。

Corning's 20-year debt-to-EBITDA is 1.2x, consistent with an A credit rating and illustrative of the conservatism of our balance sheet.

康寧的 20 年期債務與 EBITDA 之比為 1.2 倍，符合 A 信用評級，說明我們資產負債表的保守性。

We expect to maintain a strong cash position and to maintain our dividend.

我們希望保持強勁的現金狀況並維持我們的股息。

As I've previously mentioned, we expect to generate positive free cash flow for the year.

正如我之前提到的，我們預計今年將產生正的自由現金流。

And we have paused share buybacks and do not expect to add material debt in 2020.

我們已經暫停股票回購，預計 2020 年不會增加重大債務。

So in total, we have a very strong balance sheet and we have the financial resources needed for the duration of the economic downturn.

因此，總的來說，我們的資產負債表非常強勁，我們擁有經濟衰退期間所需的財政資源。

To wrap up, we had strong operational performance in the second quarter, with sequential improvements in sales, net income, EPS and free cash flow.

總而言之，我們在第二季度的運營表現強勁，銷售額、淨收入、每股收益和自由現金流均有所改善。

As the quarter progressed, demand and visibility improved.

隨著本季度的進展，需求和知名度有所改善。

This improvement has continued throughout July.

這種改善一直持續到整個 7 月。

As a result, we expect to grow sales and profits in the third quarter.

因此，我們預計第三季度的銷售額和利潤將增長。

However, we remain aware of the potential impact from the pandemic, the global recession, civil unrest and geopolitical tensions.

然而，我們仍然意識到大流行病、全球經濟衰退、內亂和地緣政治緊張局勢的潛在影響。

So how much growth will depend on end market demand and economic activity during August and September?

那麼，增長多少將取決於 8 月和 9 月的終端市場需求和經濟活動？

We will keep you updated as we move through the quarter.

我們將在整個季度中為您提供最新信息。

Stepping back, our underlying growth drivers are intact and we're successfully navigating the -- this crisis.

退後一步，我們的潛在增長動力完好無損，我們正在成功度過這場危機。

As we grow sales, we expect improved profitability.

隨著銷售額的增長，我們預計盈利能力會提高。

Furthermore, we have the capacity in place to be able to meet the sales growth with minimal investment, which we expect to result in capital efficiency gains, including ROIC improvement.

此外，我們有能力以最少的投資滿足銷售增長，我們預計這將帶來資本效率收益，包括 ROIC 改善。

Altogether, this reaffirms our confidence that Corning is positioned to emerge from this crisis stronger than ever.

總而言之，這重申了我們的信心，即康寧能夠比以往任何時候都更強大地擺脫這場危機。

Now I'll turn the call back over to Wendell.

現在我會把電話轉回 Wendell。

Thanks, Tony.

謝謝，托尼。

During the second quarter, we made great strides in positioning Corning to emerge stronger from the global health crisis and resume growth.

在第二季度，我們在使康寧從全球健康危機中走強並恢復增長方面取得了長足進步。

Sales, net income, EPS and free cash flow all increased sequentially.

銷售額、淨收入、每股收益和自由現金流均環比增長。

Corning advanced multiple initiatives throughout the second quarter, including the launch of Corning Gorilla Glass Victus and continued innovation with 5G industry leaders.

康寧在整個第二季度推進了多項舉措，包括推出康寧大猩猩玻璃 Victus 以及與 5G 行業領導者的持續創新。

On the COVID-19 front, we continue to seek ways to leverage our deep technology, manufacturing and engineering capabilities to combat the pandemic directly.

在 COVID-19 戰線上，我們繼續尋求方法，利用我們深厚的技術、製造和工程能力直接抗擊這一流行病。

We were delighted that Valor Glass was selected by the U.S. Department of Health & Human Services and the Department of Defense to accelerate delivery of COVID-19 vaccines.

我們很高興 Valor Glass 被美國衛生與公眾服務部和國防部選中，以加速 COVID-19 疫苗的交付。

Overall, our decisive action and operational execution resulted in positive free cash flow and continued leadership in the capabilities that make Corning distinctive.

總的來說，我們果斷的行動和運營執行帶來了積極的自由現金流，並在使康寧與眾不同的能力方面繼續處於領先地位。

We're delivering for our customers.

我們正在為我們的客戶提供服務。

We're outperforming our markets, and we're preserving our financial strength.

我們的表現優於我們的市場，我們正在保持我們的財務實力。

I'll conclude with an additional important development.

我將以一個額外的重要發展作為結束。

For nearly 170 years, our company has been dedicated to creating innovations that have a positive impact on the world while conducting business in a way that has positive impact on our people and our communities.

近 170 年來，我們公司一直致力於創造對世界產生積極影響的創新，同時以對我們的人民和社區產生積極影響的方式開展業務。

Now we have an opportunity to make additional contributions.

現在我們有機會做出額外的貢獻。

We're setting up an office to further build racial and social unity within the walls of Corning and in our communities.

我們正在設立一個辦公室，以進一步在康寧和我們的社區內建立種族和社會團結。

Lewis Steverson, our Chief Legal and Administrative Officer, will lead this office.

我們的首席法律和行政官 Lewis Steverson 將領導該辦公室。

With that, let's move to Q&A.

有了這個，讓我們轉向問答。

Ann?

安？

Thanks, Wendell.

謝謝，溫德爾。

Operator, we are ready for the first question.

接線員，我們準備好回答第一個問題。

(Operator Instructions) Our first question comes from Samik Chatterjee with JPMorgan.

（操作員說明）我們的第一個問題來自摩根大通的 Samik Chatterjee。

Yes.

是的。

If I can just start off with Display.

如果我可以從 Display 開始。

You've talked about kind of demand being resilient on the TV side, but as we're looking at some of the data points from panel makers, they're guiding to a substantial improvement in panel shipments quarter-on-quarter going to 3Q or something in the magnitude of 20%.

您已經談到電視方面的需求具有彈性，但是當我們查看面板製造商的一些數據點時，它們正在引導面板出貨量環比到第三季度大幅改善或 20% 左右的幅度。

So wanted to get a sense of what you're seeing in terms of -- or hearing in terms of demand from your panel customers?

因此，想了解您在面板客戶的需求方面所看到的或聽到的內容嗎？

Where does inventory stand?

庫存在哪裡？

Because I think last quarter, you were a bit concerned about the inventory level going in.

因為我認為上個季度，你有點擔心庫存水平的上升。

Yes.

是的。

Thanks, from an -- Samik, from an overall standpoint, the TV demand has clearly been resilient.

謝謝，從 Samik 的整體角度來看，電視需求顯然具有彈性。

The data points that we saw in the second quarter was the fact that either TV units were up on a year-over-year basis.

我們在第二季度看到的數據點是，任何一台電視機都同比增長。

And then by -- that was certainly better than Q1 and it was also better than, well, most people who are expecting as we went into the quarter.

然後 - 這肯定比第一季度好，而且也好於大多數人在我們進入本季度時的預期。

In addition to that, if you look at what happened in the preliminary data in June and July, I mean that data was also very strong.

除此之外，如果你看一下 6 月和 7 月的初步數據，我的意思是數據也非常強勁。

In China, you didn't see a change in that data, though that demand remained robust.

在中國，儘管需求依然強勁，但您沒有看到該數據發生變化。

And in North America and Europe, it was strong during the whole quarter and that continued.

在北美和歐洲，整個季度都表現強勁，而且這種情況還在繼續。

So, yes, I -- we think TV demand is resilient.

所以，是的，我——我們認為電視需求是有彈性的。

And we also think the supply chain change is perfectly healthy.

而且我們還認為供應鏈的變化是非常健康的。

I mean we ended the year in a healthy supply chain situation.

我的意思是我們以健康的供應鏈狀況結束了這一年。

Of course, nobody knew exactly what was going to happen in the second quarter.

當然，沒有人確切知道第二季度會發生什麼。

But given what did happen in the second quarter and the way things are going now, we don't see any supply chain issues there.

但考慮到第二季度發生的事情以及現在的發展方式，我們認為那裡沒有任何供應鏈問題。

Okay.

好的。

And if I can just follow-up on the cash flow here.

如果我能跟進這裡的現金流。

So you had a strong free cash flow quarter through the working capital improvements that you're driving.

因此，通過您正在推動的營運資本改善，您有一個強勁的自由現金流季度。

Just help me think about how sustainable those are as you start to kind of go through the recovery in terms of revenue.

當你開始在收入方面經歷復甦時，請幫我想想這些是如何可持續的。

How much of that improvement is kind of something you have to get back as you burn working capital?

當您消耗營運資金時，有多少改進是您必須收回的？

Just to trying to think about kind of how does this impact your free cash flow conversion in the long run.

只是想想想從長遠來看，這對您的自由現金流轉換有何影響。

Well certainly a lot of that was by reducing inventory.

當然，其中很大一部分是通過減少庫存來實現的。

We reduced inventory over $100 million during the quarter.

我們在本季度減少了超過 1 億美元的庫存。

And if you recall, over the last 18 months or so, as we thought our sales were going to be more stronger than they actually turned out to be, they actually built up a fair amount of inventory.

如果你還記得，在過去 18 個月左右的時間裡，當我們認為我們的銷售會比實際結果更強勁時，他們實際上建立了相當數量的庫存。

So we think there's the opportunity to continue to reduce inventory.

所以我們認為有機會繼續減少庫存。

And then just from an overall operational standpoint, one of our real focus areas of the company is on inventory management and how to get better at that.

然後從整體運營的角度來看，我們公司真正關注的領域之一是庫存管理以及如何在這方面做得更好。

So I think that at least that is sustainable for at least a couple more quarters.

所以我認為至少這至少可以持續幾個季度。

No doubt when we grow again, we'll have to consume working capital.

毫無疑問，當我們再次增長時，我們將不得不消耗營運資金。

The other thing that was a big improvement during the quarter, of course, was what happened on capital spending.

當然，本季度另一項重大改進是資本支出方面的情況。

And as you know, in the first quarter, a lot of that was the expansion capital ramping up on some of our biggest projects, such as Gen 10.5.

如您所知，在第一季度，其中很大一部分是我們一些最大項目（例如 Gen 10.5）的擴張資本。

And although we still have some of that that's going on, we reduced it significantly in Q2, and we'd expect Q3 and Q4 to be at those same levels.

儘管我們仍有一些正在發生的事情，但我們在第二季度大幅減少了它，我們預計第三季度和第四季度將處於相同水平。

I think stepping back and looking at free cash flow conversion.

我想退後一步，看看自由現金流的轉換。

Fundamentally, when we're not in a build cycle, our free cash flow conversion is excellent.

從根本上說，當我們不在構建週期時，我們的自由現金流轉換非常好。

And that's where we are right now, right?

這就是我們現在所處的位置，對嗎？

So it's less really about the specific programs and specific things we're doing.

因此，它與我們正在做的具體計劃和具體事情的關係不大。

It's more just since it takes us a couple of 3 years to build one of our major low-cost factories, there's a cycle where we invest for the future and it is that investment that drives down our free cash flow conversion.

更確切地說，因為我們花了 3 年的時間來建造我們的一個主要低成本工廠，所以我們有一個為未來投資的周期，而正是這種投資降低了我們的自由現金流轉換。

We're in a period right now where we've gotten ahead of that.

我們現在正處於領先於此的時期。

So we're in a spot where we're just in a reinvestment stage.

所以我們正處於再投資階段。

And if we work like that, we're going to have really high free cash flow conversion, and you can expect that to continue.

如果我們這樣工作，我們將有非常高的自由現金流轉換，你可以期待這種情況會持續下去。

Our next question comes from Steven Fox with Fox Advisors.

我們的下一個問題來自 Fox Advisors 的 Steven Fox。

Wendell, I was wondering if you could maybe step back and give us a bigger-picture view on the new Optical cycle.

溫德爾，我想知道你是否可以退後一步，讓我們對新的光學週期有一個更大的了解。

You talked about network headroom basically going away.

你談到網絡淨空基本上消失了。

And it sounds like site access is still an issue, but not as big of an issue.

聽起來站點訪問仍然是一個問題，但不是什麼大問題。

So if you wanted to think about maybe the next 4 to 6 quarters versus how you performed in the year or 2 before the downturn in Optical, how do we think about that under the sort of new world we're living in?

因此，如果您想考慮未來 4 到 6 個季度與您在光學衰退前一年或兩年的表現相比，我們如何看待我們所生活的那種新世界？

Steve, I think that's an excellent question.

史蒂夫，我認為這是一個很好的問題。

And to sort of balance up the known versus the unknown, and then try to come to a conclusion.

並平衡已知與未知，然後嘗試得出結論。

On the known side, both our cloud providers as well as our network service providers, all are experiencing very strong growth, as you heard from Tony and you've heard from me during this call.

在已知的方面，我們的雲提供商和網絡服務提供商都在經歷非常強勁的增長，正如你從托尼那裡聽到的，你在這次電話會議上也從我那裡聽到過。

That strong growth, and they see an opportunity for more revenue production going forward, and they see that fiber-based networks have -- are just lower cost.

這種強勁的增長，他們看到了未來產生更多收入的機會，他們看到基於光纖的網絡只是成本更低。

And you're starting to see some commentary, especially from the network providers, about how they can combine and merge all the various services on to one high-capacity fiber network and therefore open up lots of avenues towards revenue creation, all off one capital investment.

您開始看到一些評論，尤其是來自網絡提供商的評論，內容是關於他們如何將所有各種服務組合併合併到一個高容量光纖網絡中，從而開闢許多創收途徑，全部來自一筆資本投資。

So all that is stacking up for sort of powerful forces to put Optical Communications back in a cycle of growth.

因此，所有這些都在積累某種強大的力量，使光通信重新進入增長周期。

On the unknown side, real people have to install these networks.

在未知的一面，真人必須安裝這些網絡。

Real people have to show up to put in place these massive cloud-based data centers.

真正的人必須出現才能建立這些龐大的基於雲的數據中心。

And even though people are resuming putting technicians in the field, it is as -- at a much less rate than what it would be -- what would be needed to support historical build cycles.

儘管人們正在恢復將技術人員投入現場，但它的速度遠低於支持歷史構建週期所需的速度。

So we still have the pandemic here, and so that makes actual prediction just quarter-to-quarter what will happen to be difficult.

所以我們這裡仍然有大流行病，因此很難按季度實際預測會發生什麼。

But I think as you said, Steve, because that's what's behind the question, the fundamentals look really strong.

但我認為正如你所說，史蒂夫，因為這就是問題背後的原因，基本面看起來非常強大。

Our market position looks really strong.

我們的市場地位看起來非常強大。

We should be entering a growth cycle.

我們應該進入一個增長周期。

Now we just got to see how the world deals with the pandemic.

現在我們只需要看看世界是如何應對這一流行病的。

Our next question comes from Asiya Merchant with Citigroup.

我們的下一個問題來自花旗集團的 Asiya Merchant。

Great.

偉大的。

Congratulations on a good quarter.

祝賀一個好的季度。

A couple of questions.

幾個問題。

One just on Optical.

一個就在光學上。

There was commentary that the Optical segment performed sort of in line with the passive Optical market decline.

有評論稱，光學部門的表現與無源光學市場的下滑一致。

And Wendell just talked about all the labor constraints, et cetera, that's going on.

溫德爾剛剛談到了正在發生的所有勞動力限制等等。

How should we think about -- Corning's always maintained their leadership across their end markets.

我們應該如何思考——康寧始終保持其在終端市場的領先地位。

When do we expect or when should we expect Corning to, again, resume growth that outpaces the broader market?

我們何時或何時應該期待康寧再次恢復超過大盤的增長？

And then I have another follow-up on capacity and margins.

然後我對容量和利潤率進行了另一個跟進。

This year, if we're doing our job.

今年，如果我們正在做我們的工作。

And that's the way we think about it.

這就是我們思考它的方式。

We should be outpacing the market, and we will get on with that post haste.

我們應該超越市場，我們將繼續匆忙。

Okay.

好的。

And then just on margins, if I think about -- obviously, you guys are making some progress here sequentially in the third quarter, that's the commentary.

然後就利潤率而言，如果我考慮 - 顯然，你們在第三季度連續取得了一些進展，這就是評論。

And typically, 3Q is up 5% or so on the top line and as the top line falls through the margins, et cetera.

通常情況下，第三季度的營收增長了 5% 左右，而營收則跌破了利潤率，等等。

There's some investor confusion around how idling capacity should help margins.

對於閒置產能如何幫助提高利潤率，投資者存在一些困惑。

If somebody can walk us through the dynamics there.

如果有人可以帶我們了解那裡的動態。

Typically, idling capacity would lead to perhaps a hit on margins.

通常，閒置產能可能會影響利潤率。

And how should we think about the margin improvements in the back half?

我們應該如何考慮後半部分的利潤率改善？

You're -- Asiya, you're correct.

你是——Asiya，你是對的。

I think when we idle capacity, that does hurt the margins, especially if you're having less production than you're actually selling as you also take down inventory, which is, of course, what we did in Q2 and Q3.

我認為當我們閒置產能時，這確實會損害利潤率，特別是如果您的產量低於實際銷售量，因為您還減少了庫存，這當然是我們在第二季度和第三季度所做的。

On the other side though, we did a lot of cost reduction efforts, and that ends up helping margins.

但另一方面，我們做了很多降低成本的工作，最終提高了利潤率。

And so we ended up in Q2 with margins very similar to what we had in Q1.

因此，我們在第二季度的利潤率與第一季度非常相似。

On a gross margin level and then on an operating margin level, of course, we did better than that.

當然，在毛利率水平和營業利潤率水平上，我們做得更好。

So as we look forward, the key here is, is to increase sales.

因此，正如我們所期待的，這裡的關鍵是增加銷售額。

And as we put more sales through our factories and more sales through our OpEx structure, we'll see expansion in margins.

隨著我們通過我們的工廠增加銷售額並通過我們的運營支出結構增加銷售額，我們將看到利潤率的擴大。

Our next question comes from George Notter with Jefferies.

我們的下一個問題來自 Jefferies 的 George Notter。

I guess I wanted to ask about just the fundamentals in the Display business.

我想我想問的只是顯示器業務的基本面。

I'm thinking more strategically.

我正在更具戰略性地思考。

There's a lot of moving parts there, of course.

當然，那裡有很多活動部件。

You guys are pacing some of your investment in Gen 10.5.

你們正在調整對 Gen 10.5 的一些投資。

You've got pending exits of some of the LCD panel-making facilities in Korea.

韓國的一些 LCD 面板製造工廠有待退出。

Certainly, we hear about CBC rumored to be for sale.

當然，我們聽說有傳言稱 CBC 將被出售。

I mean can you just talk about what you're seeing over there?

我的意思是你能談談你在那裡看到的嗎？

And how that kind of plays into your dynamics strategically as you look forward?

當您展望未來時，這種情況如何戰略性地影響您的動力？

Thanks for the question.

謝謝你的問題。

What you've heard from us in the past really remains -- those fundamental drivers remain in place, which is we have been preparing for a number of years for the ascendancy of the Chinese panel-making infrastructure.

你過去從我們這裡聽到的確實仍然存在——那些基本驅動因素仍然存在，我們多年來一直在為中國面板製造基礎設施的優勢做準備。

And because of the particular way that economy works, that would leave what was the strongest region in terms of production, Korea, at a cost disadvantage.

而且由於經濟運行的特殊方式，這將使生產方面最強大的地區韓國處於成本劣勢。

Once they made the decision not to go to Gen 10.5, that sort of was -- the die was cast.

一旦他們做出不使用 Gen 10.5 的決定，那就是——命運已定。

So that's why we have been on our investment cycle in China with 3/4 of the support coming from our customers or the Chinese government in one form or another.

這就是為什麼我們在中國的投資週期中有 3/4 的支持來自我們的客戶或中國政府以一種或另一種形式。

So those trends look like they continue to move in our direction.

因此，這些趨勢看起來會繼續朝著我們的方向發展。

It all just happened a little bit faster than we were planning because Korea ended up -- Samsung specifically ended up making decisions a little faster than what was their original plan.

這一切發生的比我們計劃的要快一點，因為韓國最終——三星最終做出的決定比他們最初的計劃要快一點。

So we don't really have all of our Gen 10.5 facilities up to support all that demand yet, and that's what we're working through.

因此，我們還沒有真正擁有所有 Gen 10.5 設施來支持所有這些需求，而這正是我們正在努力解決的問題。

CBC, of course, is a strong customer of ours.

當然，CBC 是我們的重要客戶。

We would expect our market position to continue to grow as the trends towards China continue and the trends towards our long-term strategic partners continue.

隨著對中國的趨勢繼續發展以及對我們長期戰略合作夥伴的趨勢繼續發展，我們預計我們的市場地位將繼續增長。

Did that answer your question, George?

喬治，這回答了你的問題嗎？

Very well, yes.

很好，是的。

Our next question comes from Shannon Cross with Cross Research.

我們的下一個問題來自 Cross Research 的 Shannon Cross。

I was just curious, given the vaccine, and obviously, you've gotten some funding from the government, but just in general, sort of this push to move manufacturing back to the U.S. then and clearly, a significant amount of government dollars that are out there right now.

我只是好奇，考慮到疫苗，很明顯，你已經從政府那裡得到了一些資金，但總的來說，這種推動將製造業轉移回美國的努力很明顯，大量的政府資金是現在就在那裡。

If this has changed really your thought process on time line for Valor to provide meaningful contribution to the business.

如果這真的改變了您對 Valor 為業務做出有意義貢獻的時間表的思考過程。

The simple answer, Shannon, is yes.

香農，簡單的回答是肯定的。

Any idea of the magnitude of the pull-in of time line?

知道時間線拉入的幅度嗎？

(inaudible) if you think about it.

（聽不清）如果你考慮一下。

We have an excellent idea.

我們有一個絕妙的主意。

Yes.

是的。

We have an excellent idea.

我們有一個絕妙的主意。

We're not disclosing it yet.

我們還沒有透露它。

Here's the challenge really in why we're not giving specific guidance here on Valor is we are putting a significant amount of our effort behind the specific human health need of we have to protect our people and the people around the globe with the vaccine.

真正的挑戰在於，為什麼我們沒有在這裡提供有關 Valor 的具體指導，因為我們正在為特定的人類健康需求投入大量精力，即我們必須用疫苗保護我們的人民和全球人民。

So that's where we're aiming our efforts.

這就是我們努力的方向。

So sort of any prediction on the specific sales as they evolve would have to involve like what is going to be the success and timing of the vaccine.

因此，隨著它們的發展，對特定銷售的任何預測都必須涉及疫苗的成功和時機。

So what you can see, the way to think about it is we're now accelerating the building of our high-volume manufacturing facility.

所以你可以看到，思考它的方式是我們現在正在加速建設我們的大批量製造設施。

And we're in the midst of pouring concrete on the floor, too, inside that shell.

我們也在那個外殼內的地板上澆築混凝土。

We're in the midst of quickly ramping our equipment, and we're doubling the output of our Big Flats, New York facility.

我們正在快速提升我們的設備，我們正在將紐約大弗萊茨工廠的產量翻一番。

So we're going very fast, but so are our customers going very fast, and it's really hard to pick winners and losers.

所以我們走得非常快，但我們的客戶也走得非常快，而且很難選擇贏家和輸家。

So I still the -- here's the way I think about it financially.

所以我仍然 - 這是我在財務上思考它的方式。

I still don't think, if you're primarily focused on the near term, you should worry much about Valor driving our numbers, right?

我仍然不認為，如果你主要關注近期，你應該擔心 Valor 推動我們的數字，對吧？

If you're worried about the long term, this is an excellent sign for us.

如果你擔心長期，這對我們來說是一個很好的跡象。

All the stuff that we bet on, which is you needed U.S.-based manufacturing, that you needed a new pharmaceutical package, that we needed to have more fill-line capacity, and we could do that through our packaging, that we needed to make patients safer.

我們打賭的所有東西，你需要美國的製造，你需要一個新的藥品包裝，我們需要有更多的灌裝線能力，我們可以通過我們的包裝來做到這一點，我們需要製造患者更安全。

All those bets look like they're coming true.

所有這些賭注看起來都在成真。

But that's really about the long term, it will be a big driver.

但這真的是關於長期的，它將成為一個重要的驅動力。

Meanwhile, we just want to make you safe, and we want to do our part.

與此同時，我們只想讓你安全，我們想儘自己的一份力量。

Does that make sense, Shannon?

這有意義嗎，香農？

It does.

確實如此。

It does.

確實如此。

Can you talk a bit about any competitive moves that you've seen from some of the others out in the industry?

你能談談你從業內其他一些人那裡看到的任何競爭舉措嗎？

Because it seems like you guys are in a really good position, but I'm wondering if you've seen anything pop up recently.

因為你們似乎處於非常有利的位置，但我想知道你們最近是否看到任何突然出現的東西。

Well, in this industry, remember, we're an attacker.

嗯，在這個行業，請記住，我們是攻擊者。

So historically, we haven't had much of a position in pharmaceutical packaging.

因此，從歷史上看，我們在醫藥包裝領域的地位並不高。

And it was only when we saw significant issues with the packaging of today that we developed the Valor innovation and decided we needed to do this to make patients safer.

只有當我們看到今天的包裝存在重大問題時，我們才開發出 Valor 創新產品，並決定我們需要這樣做來讓患者更安全。

And we needed to bring our capabilities to that fight.

我們需要將我們的能力帶到這場戰鬥中。

So we're really the attacker.

所以我們真的是攻擊者。

We're just getting started, but I think you're right.

我們才剛剛開始，但我認為你是對的。

I think we're off to a robust-enough start to give our competitors a heck of a wakeup call.

我認為我們已經有了一個足夠強勁的開端，足以給我們的競爭對手敲響警鐘。

And our next question comes from Tim Long with Barclays.

我們的下一個問題來自巴克萊銀行的 Tim Long。

This is Peter Zdebski on for Tim.

這是蒂姆的彼得茲德布斯基。

Congratulations on the quarter.

祝賀這個季度。

I wanted to ask about the Specialty Materials outperformance.

我想問一下特種材料的出色表現。

Can you help us parse out how significant the impact from work from home and the strong semiconductor equipment demand was relative to smartphone premium products?

您能否幫我們分析一下在家工作和強勁的半導體設備需求相對於智能手機高端產品的影響有多大？

And then maybe how sustainable you see that as we go into 2H?

然後，當我們進入 2H 時，您認為它的可持續性如何？

I think from an overall standpoint, each of those items were roughly about 1/3 of the reason for the outperformance.

我認為從整體的角度來看，這些項目中的每一項大約佔表現出色的原因的 1/3 左右。

I mean, clearly, what happened in the glass that we sell, both the tablets and the parts that we sell to notebook computers that have Gorilla Glass on them, was very important to us, and we think it's a good example of the innovations that we have that caused us to perform better than the underlying market.

我的意思是，很明顯，我們銷售的玻璃，包括平板電腦和我們銷售給裝有大猩猩玻璃的筆記本電腦的部件，發生了什麼對我們來說非常重要，我們認為這是創新的一個很好的例子我們的表現優於基礎市場。

And then semiconductor performance was also good.

然後半導體性能也不錯。

I mean the demand for advanced chipsets really had made a difference there.

我的意思是對高級芯片組的需求確實在那裡產生了影響。

And then from a glass standpoint, as we said, we've -- as people get ready to -- as our customers get ready to introduce new products in the back half of the year, they, of course, pull on those products early, and we saw nice demand there, too.

然後從玻璃的角度來看，正如我們所說，我們已經 - 隨著人們做好準備 - 當我們的客戶準備在今年下半年推出新產品時，他們當然會提前推出這些產品，我們也看到了很好的需求。

And our next question comes from Meta Marshall with Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Meta Marshall。

Great.

偉大的。

Maybe just a question for me on the Optical segment picking up, but I just wonder if you could give a sense of the breadth of that pickup.

也許只是一個關於光學部分拾音器的問題，但我只是想知道您是否可以了解該拾音器的廣度。

Is it amongst kind of 1 or 2 major customers?

它屬於 1 或 2 個主要客戶嗎？

Or are you seeing it kind of across the board?

或者你是否看到了它的全面性？

And any commentary on hyper-scale customers in terms of their kind of Optical demand?

對超大規模客戶的光學需求有何評論？

I think from an overall standpoint, we especially saw it in the carrier market.

我認為從整體的角度來看，我們尤其在運營商市場看到了它。

I mean it's certainly more than 1 or 2 customers, but it was very much driven in the carrier market.

我的意思是它肯定不止 1 或 2 個客戶，但它在運營商市場中得到了很大的推動。

And when you see our detailed numbers, you'll see that those were the numbers that were up on a sequential basis.

當您看到我們的詳細數字時，您會發現這些數字是按順序上升的。

In the enterprise market, it was a little bit more mixed.

在企業市場上，則有點混雜。

I think from a data center standpoint, that's where a lot of the labor constraint really showed up.

我認為從數據中心的角度來看，這才是真正出現大量勞動力限制的地方。

I mean some data centers less so than others, but I think that's one of the reasons that those sales were down on a quarter-over-quarter basis.

我的意思是一些數據中心比其他數據中心少，但我認為這是這些銷售額環比下降的原因之一。

But then also, a lot of our enterprise customers are small and medium businesses, and also corporate spending.

但同時，我們的許多企業客戶都是中小型企業，也是企業支出。

And we saw those areas were clearly impacted by what's happening in the outside world.

我們看到這些地區明顯受到了外部世界發生的事情的影響。

But there was a broad set especially in the carrier business.

但是有一個廣泛的範圍，尤其是在運營商業務中。

Got it.

知道了。

And then maybe just on the restructuring charge, and you noted that it was due to reprioritization of some R&D projects.

然後可能只是關於重組費用，你注意到這是由於一些研發項目的重新排序。

Are there any major projects we could -- should consider discontinued?

是否有任何重大項目我們可以——應該考慮停止？

Or just any commentary there?

或者只是那裡的任何評論？

Yes.

是的。

I mean it was very specifically a stealth project that we hadn't really talked a lot about externally, that had originally been initiated by a customer request.

我的意思是，這是一個非常具體的秘密項目，我們並沒有在外部談論太多，它最初是由客戶請求發起的。

And if you recall on our 3-4-5 Strategy, there's the 20% that's outside of 3-4-5 capabilities where we put our energy and efforts into.

如果您還記得我們的 3-4-5 戰略，我們會在 3-4-5 能力之外投入 20% 的精力和努力。

And it -- in -- it's one of those projects in that 20% category.

它——在——它是那 20% 類別中的那些項目之一。

And of course, in this environment, it made sense for us to go back and look at that 20%, and so that's what we did.

當然，在這種環境下，我們回頭看看那 20% 是有意義的，這就是我們所做的。

And we ended up restructuring impairing some of those assets.

我們最終重組損害了其中一些資產。

Our next question comes from Rod Hall with Goldman Sachs.

我們的下一個問題來自高盛的 Rod Hall。

I wanted to start with the lack of guidance or the lower guidance for September and just see if I'm interpreting this correctly.

我想從 9 月缺乏指導或較低的指導開始，看看我是否正確解釋了這一點。

It seems like your Display commentary is positive and then [Optical's always uncertain].

看起來您的 Display 評論是正面的，然後 [Optical's always uncertain]。

So that leaves us with Specialty as the source of increased uncertainty in September.

因此，這讓我們將專業作為 9 月份不確定性增加的來源。

So I wanted to check and see if that's accurate or if that's the right way to interpret this.

所以我想檢查一下這是否準確，或者這是否是正確的解釋方式。

And then if that is right, what's driving that?

如果那是對的，那是什麼推動了它？

Is that product timing?

那是產品時機嗎？

Or is it demand uncertainty?

還是需求的不確定性？

Could you maybe double-click on why the reduced guidance in September?

您能否雙擊為什麼 9 月份的指導減少？

And also, maybe tell us whether you -- and you're going to continue to provide a lower level of guidance like this or is this just a one-off?

而且，也許告訴我們你是否 - 你會繼續提供像這樣的較低級別的指導，還是這只是一次性的？

And then I have a follow-up.

然後我有一個後續行動。

So let's start with your premise, okay?

那麼讓我們從你的前提開始，好嗎？

We're not providing lower guidance for September nor are we providing lower guidance for Specialty or anything like this.

我們不會為 9 月提供較低的指導，也不會為專業或類似的東西提供較低的指導。

Well, this is -- I think you're overthinking it.

好吧，這是——我認為你想多了。

Here's the situation.

情況是這樣的。

Really all lights are flashing green in our specific industries and in our performance of our units.

實際上，在我們的特定行業和我們單位的績效中，所有的燈都在閃爍綠色。

Our financial executives, our operational executives, our strategic executives were all for giving more specific guidance this quarter, okay?

我們的財務主管、我們的運營主管、我們的戰略主管都希望在本季度提供更具體的指導，好嗎？

I'm the problem.

我是問題所在。

And it's not anything that we're seeing happening specifically in our industries.

這並不是我們在我們的行業中看到的特別發生的事情。

It's just as I look at the world and I see the pandemic doing what it's doing, I see a very broad global recession.

就像我環顧世界，看到大流行正在做它正在做的事情一樣，我看到了一場非常廣泛的全球衰退。

I see civil unrest really across the globe.

我看到全球各地都在發生內亂。

And I see an awful lot of global tensions in a geopolitical sense.

我在地緣政治意義上看到了很多全球緊張局勢。

And it is that macro area that makes me say, "I think there's just too much uncertainty just to count on what we're seeing with our own 2 eyes."

正是這個宏觀領域讓我說，“我認為僅僅依靠我們自己的兩隻眼睛所看到的東西就有太多的不確定性。”

But if we just look at our data, I think we'd be comfortable giving specific guidance, and you would view that guidance as positive.

但如果我們只看我們的數據，我認為我們會很樂意提供具體的指導，你會認為該指導是積極的。

And I'm just more worried about the pricing uncertainty.

而且我只是更擔心定價的不確定性。

Does that make sense to you, Rod?

這對你有意義嗎，羅德？

I know I must disappoint you.

我知道我一定讓你失望了。

But does it make sense to you?

但這對你有意義嗎？

Yes.

是的。

No, no, no.

不不不。

Wendell, that's very helpful color.

溫德爾，這是非常有用的顏色。

I just -- that's very helpful.

我只是 - 這非常有幫助。

So that answers my question.

這樣就回答了我的問題。

I appreciate that.

我很感激。

And then the second thing, I wanted to drill into the working capital again, Tony.

然後第二件事，我想再次鑽入營運資金，托尼。

We -- one of the standouts for us was the debt payable.

我們 - 我們的突出表現之一是應付債務。

That came down quite a bit in June and wondering, is that a sustainable level?

這在 6 月份下降了很多，我想知道，這是一個可持續的水平嗎？

Or do you expect that to bounce back to kind of more historical average levels?

還是您希望它反彈到歷史平均水平？

Or -- and maybe can you tell us what drove that?

或者 - 也許你能告訴我們是什麼驅動了它？

Yes.

是的。

No.

不。

I think from an overall standpoint, I mean, Wendell's right.

我認為從整體的角度來看，我的意思是，溫德爾是對的。

I mean we're in a period of time where our free cash flow conversion is going to be strong because we're not doing the investment capital that we've done in the last several years.

我的意思是，我們正處於自由現金流轉換強勁的時期，因為我們沒有像過去幾年那樣進行投資。

And so on any given line item on the cash flow statement, there's a variety of things that happen on a month-in and month-out standpoint.

因此，在現金流量表的任何給定行項目上，從月入月出的角度來看，會發生各種各樣的事情。

But we're committed, and we're going to deliver free cash flow for the year.

但我們承諾，我們將在今年提供自由現金流。

And that's what our focus is.

這就是我們的重點。

And we are thrilled with our performance in the second quarter.

我們對第二季度的表現感到興奮。

And I think it really helps investors understand our ability to generate that free cash flow.

我認為這確實有助於投資者了解我們產生自由現金流的能力。

Our next question comes from Wamsi Mohan with Bank of America.

我們的下一個問題來自美國銀行的 Wamsi Mohan。

Yes.

是的。

Wendell, you noted strong free cash flow margins coming off a build cycle.

溫德爾，你注意到構建週期後強勁的自由現金流利潤率。

I think, Tony, you just referenced that, too.

我想，托尼，你也提到了這一點。

I was wondering how long typically these post-build cycles are, especially given the fact that Display has been usually a large source of that?

我想知道這些構建後周期通常有多長，尤其是考慮到 Display 通常是其中的一個重要來源這一事實？

Historical perspective on that would be helpful.

對此的歷史觀點會有所幫助。

And given COVID now, do you think that, that is extended for a longer period of time?

現在考慮到 COVID，您認為這會延長更長的時間嗎？

And I have a follow-up.

我有一個後續行動。

Wamsi, what an excellent question.

Wamsi，多麼好的問題。

In a way what you're asking is, when will we be in our next build cycle, which usually is for revenue that's a couple of years out?

在某種程度上，你問的是，我們什麼時候進入下一個構建週期，這通常是為了幾年後的收入？

I think it's really hard to answer that question, Wamsi.

我認為很難回答這個問題，Wamsi。

If you woke me up in the middle of the night and asked me, I'd say, "I think we're going to be in a period of really staying within more of the -- a reinvestment repurpose pieces of our wheel, right, and event pieces of our wheel for a time period that, in your normal models, you should be able to count on."

如果你在半夜叫醒我並問我，我會說，“我認為我們將進入一個真正停留在更多的時期——對我們輪子的再投資重新利用，對吧，以及我們車輪的事件部件，在您的普通模型中，您應該可以信賴的一段時間。”

At the same time, what we hope for is that things like our successful help with the vaccine, that this -- the movement towards more optical networks and all those things put us in the long-term spot, those megatrends, our conversion of more value in auto to be back in our build cycle.

與此同時，我們希望的是，我們成功地幫助疫苗，這 - 向更多光網絡的運動以及所有這些事情讓我們處於長期位置，那些大趨勢，我們更多的轉換auto 的價值將回到我們的構建週期中。

But I think we'll have plenty of warning, Wamsi.

但我認為我們會有很多警告，Wamsi。

Sorry, I don't have a more specific answer for you.

抱歉，我沒有更具體的答案給你。

No, no.

不，不。

And Tony, if I could, the funding that the government is providing, the $204 million that you alluded to, to expand Valor manufacturing capacity, how should we think of that flowing through sort of your statements?

托尼，如果我可以的話，政府提供的資金，你提到的 2.04 億美元，用於擴大 Valor 的製造能力，我們應該如何看待你的陳述？

Is that a -- does it get reflected in CapEx right away?

那是——它會立即反映在資本支出中嗎？

Is it all-in CapEx?

全部投入資本支出嗎？

Can you give us any color on that?

你能給我們任何顏色嗎？

Yes.

是的。

I think the way to think about it, Wamsi, is that as we spend this money, this gets reimbursed, and so it just gets netted out into our statements.

Wamsi，我認為考慮的方式是，當我們花這筆錢時，這筆錢會得到報銷，所以它就會被抵銷到我們的報表中。

I mean yes, it is for capacity, so most of it is in CapEx, but there's also some operating expenses, and it will get reimbursed there, too.

我的意思是，是的，它是為了產能，所以大部分都在資本支出中，但也有一些運營費用，它也會在那裡得到報銷。

And that question comes from Mehdi Hosseini with SIG.

這個問題來自 SIG 的 Mehdi Hosseini。

2 follow-ups.

2 次跟進。

Tony, given all the changes going within the company, an increased focus and at reducing the cost, should I expect your operating margin were to expand from here on even if revenues were to go flat?

托尼，考慮到公司內部發生的所有變化，更加關注和降低成本，我是否應該期望您的營業利潤率從現在開始擴大，即使收入持平？

Just for the scenario analysis.

僅用於場景分析。

And I have a follow-up.

我有一個後續行動。

Yes.

是的。

I mean clearly, what we've done in the second quarter is reduce our operating cost, and that will be reflected as we get into Q3 and Q4.

我的意思很明確，我們在第二季度所做的是降低運營成本，這將在我們進入第三季度和第四季度時得到體現。

From our overall standpoint, as we've talked about before, our real focus areas is to get back to growing our sales and growing our profitability.

從我們的整體角度來看，正如我們之前談到的那樣，我們真正關注的領域是回到增長我們的銷售額和提高我們的盈利能力。

And when our sales grow, you expect to see improved profitability, too.

當我們的銷售額增長時，您也希望看到盈利能力的提高。

Okay.

好的。

And then, Wendell, I just want to better understand the dynamics impact in the TV industry, all right?

然後，溫德爾，我只是想更好地了解電視行業的動態影響，好嗎？

Can you remind me of what is the mix of 65-inch TV as a percentage of the overall TV demand or shipment?

你能提醒我 65 英寸電視在整體電視需求或出貨量中所佔的比例是多少嗎？

Maybe off the top of my head, I'm drawing a blank on that.

也許在我的腦海中，我對此一片空白。

That's clearly where all the -- a lot of the growth is going.

這顯然是所有 - 很多增長的方向。

It was up over -- almost 40% on a year-over-year basis.

同比增長近 40%。

But when we have our follow up call, we'll get you the answer to that.

但是當我們接到跟進電話時，我們會給你答案。

Great.

偉大的。

Thanks, Mehdi, and thanks, everybody, for joining us today.

謝謝 Mehdi，也謝謝大家今天加入我們。

Before we close out, I just want to let you know that we will attend the Jefferies Semiconductor IT Hardware and Communications Infrastructure Summit on September 2 and Citi's 2020 Global Technology Conference on September 9, and both will be virtual conferences.

在我們結束之前，我只想告訴你，我們將參加 9 月 2 日的 Jefferies Semiconductor IT 硬件和通信基礎設施峰會以及 9 月 9 日的花旗 2020 年全球技術大會，兩者都將是虛擬會議。

So once again, thank you.

所以再一次謝謝你。

And Joelle, please disconnect all lines.

Joelle，請斷開所有線路。

Ladies and gentlemen, this concludes today's conference call.

女士們，先生們，今天的電話會議到此結束。

Thank you for participating.

感謝您的參與。

You may now disconnect.

您現在可以斷開連接。