It's hard to believe it's already been nearly four years since Corning (NYSE:GLW) unveiled its ambitious 2016-2019 "Strategy and Capital Allocation Framework." At the time, the glass technologist initially pledged to deploy over $20 billion in capital -- to be largely funded by its operating cash flow -- including returning at least $10 billion to shareholders through repurchases and increasing dividends, as well as investing roughly $10 billion back in the business toward future growth opportunities through a combination of research and development, capital spending, and strategic acquisitions.
In fact, Corning upped the ante along the way, ultimately returning over $12.5 billion to investors through dividends and share repurchases and investing $11 billion toward capturing future growth and solidifying its industry leadership.
Corning Chairman and CEO Wendell Weeks put it simply: "We did what we said we would do, and our shareholders have benefited."
But that naturally raises the question: What's next?
A new beginning
With its original promises effectively fulfilled -- and with its stock price up nearly 80% as a result even excluding its dividend payments, which have increased 50% -- it's time to reap the benefits of those investments. To that end, Corning recently announced its new 2020-2023 "Strategy and Growth Framework."
Over the course of its new four-year plan, Corning is targeting compound annual sales growth of 6% to 8%, primarily stemming from organic growth in its five market-access platforms.
More specifically within those platforms, the company believes its core optical communications business will grow twice as fast as the broader passive optical market (helped by demand from 5G and hyperscale data centers). Its automotive market sales will double thanks to both its new gasoline particulate filter products and automotive glass. Mobile consumer electronics sales should "continue on a path to doubling" with help from Corning Gorilla Glass. Life sciences product growth should "at least" double that of the broader life-sciences industry through cell- and gene-therapy demand. Finally, the legacy display business should remain stable, as the impact of moderating price declines should be offset by new manufacturing capacity and larger television screen sizes.
The bottom line
Meanwhile, this top-line growth should translate to even greater 12% to 15% compound annual growth in earnings per share, aided by a combination of operating leverage and continued share repurchases. On that note, Corning renewed its pledge to return $8 billion to $10 billion to shareholders over the next four years through buybacks and dividends, the latter of which should continue to increase on a per-share basis by at least 10% each year.
"We believe that Corning is more resilient than at any point in its history," stated CFO Tony Tripeny -- a bold pronouncement considering the company has successfully weathered (and fostered, really) every technological and macroeconomic disruption imaginable since its founding in 1851.
"Our strategic investments are paying off and our relationships with industry-leading customers are creating new opportunities for collaboration and growth," Tripeny added. "Based on these factors and our record of execution, we are confident in our ability to meet the long-term goals we are setting today."
"Long-term" seems like a generous description for this four-year plan given Corning's storied history. But if Corning is able to once again deliver on its promises for new growth, I suspect the next several years could be its best yet.