Corning Inc. (NYSE:GLW)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrates an overall rise from 2019 through 2021, increasing from 968 million USD in 2019 to a peak of 2088 million USD in 2021. However, this upward trend reverses subsequently, with NOPAT declining to 1544 million USD in 2022 and further decreasing to 817 million USD in 2023. This indicates a significant reduction in operating profitability in the most recent years.

Invested Capital

Invested capital shows fluctuations across the periods. It increases notably from 18,872 million USD in 2019 to 21,233 million USD in 2020 but then declines to 19,716 million USD in 2021. From 2021 onwards, it remains relatively stable with minor variations, closing at 20,411 million USD in 2023. This suggests some adjustments in capital deployment, with no consistent growth or reduction in invested capital during the latter years.

Return on Invested Capital (ROIC)

ROIC follows a pattern similar to NOPAT initially, rising from 5.13% in 2019 to 10.59% in 2021, reflecting improved efficiency and profitability relative to invested capital. Nevertheless, following this peak, ROIC decreases to 7.85% in 2022 and further declines to 4.00% in 2023, indicating reduced returns generated from the capital base. The significant drop in 2023 contrasts sharply with prior years' improvements and suggests profitability challenges.

Summary

The financial performance indicates a period of growth and improved returns culminating in 2021, followed by a marked decline in profitability measures through 2022 and 2023. Despite fluctuations, invested capital levels remain fairly steady after 2020. The combined decrease in NOPAT and ROIC in recent years highlights potential issues affecting efficiency or market conditions. These trends warrant further investigation to identify underlying causes and to develop strategies for reversing the downward profitability trajectory.

Over the observed period, several notable trends can be identified in the financial performance and efficiency metrics.

Operating Profit Margin (OPM)

The operating profit margin displayed a generally positive trajectory from 2019 through 2021, increasing from 12.71% to a peak of 18.83%. However, after this peak, a decline is evident, with the margin decreasing to 14.61% in 2022 and further dropping sharply to 8.98% in 2023. This suggests an initial improvement in operational profitability, followed by a significant erosion in the later years.

Turnover of Capital (TO)

The turnover of capital ratio showed slight fluctuations without a clear upward or downward trend. Starting at 0.61 in 2019, it dipped to 0.58 in 2020, then rose to 0.71 and 0.72 in 2021 and 2022, respectively, before declining again to 0.62 in 2023. This pattern indicates varying efficiency in utilizing capital to generate revenue, with no sustained improvement.

One Minus Effective Cash Tax Rate (1–CTR)

This metric, representing the proportion of pre-tax income retained after cash tax payments, peaked notably at 90.18% in 2020, indicating a low cash tax outflow that year. It subsequently decreased to 79.38% in 2021, 74.69% in 2022, and 72.31% in 2023. Despite the decline after 2020, values remained elevated relative to 2019 (66.18%), suggesting some improvement in tax efficiency compared to the start of the period.

Return on Invested Capital (ROIC)

ROIC improved steadily from 5.13% in 2019 to 10.59% in 2021, reflecting effective earning power on invested capital during these years. However, this positive trend reversed from 2021 onward, with ROIC decreasing to 7.85% in 2022 and further falling to 4% in 2023, signaling a decline in capital profitability in recent periods.

In summary, the financial data reveal an initial phase of improving profitability and return metrics through 2021, followed by significant declines in operating profit margin and return on invested capital thereafter. Capital turnover efficiency showed variability without a clear directional trend, while tax efficiency peaked in 2020 and diminished in subsequent years, albeit remaining higher than the 2019 baseline.

The analysis of the financial data reflects several trends in key performance indicators over a five-year period.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT showed a noteworthy increase from 2019 to 2021, rising from 1,462 million USD to a peak of 2,630 million USD in 2021. However, this upward trajectory reversed in subsequent years, with NOPBT declining to 2,067 million USD in 2022 and further dropping significantly to 1,130 million USD in 2023. This indicates a substantial reduction in operating profitability after 2021.

Adjusted Net Sales

Adjusted net sales demonstrated a steady increase from 11,503 million USD in 2019 to 14,146 million USD in 2022, representing gradual growth in top-line revenue. Despite this growth, adjusted net sales declined to 12,579 million USD in 2023, suggesting a contraction in sales after 2022.

Operating Profit Margin (OPM)

The operating profit margin followed a similar pattern to NOPBT. The margin improved from 12.71% in 2019 to a high of 18.83% in 2021, indicating enhanced operational efficiency and profitability. Nevertheless, the margin decreased thereafter to 14.61% in 2022 and then sharply to 8.98% in 2023. This decline signals a deterioration in cost management or pricing pressures affecting operating income relative to sales in recent years.

Overall, the data reveal a period of improving profitability and sales growth until 2021, followed by a marked decline in both profitability and sales in 2023. The sharp falls in NOPBT and operating profit margin indicate potential challenges impacting operational efficiency and profitability that warrant further investigation.

The financial data reveals several notable trends over the five-year period from 2019 to 2023.

Adjusted Net Sales

The adjusted net sales show an overall increasing trend from 2019 through 2022, rising from $11,503 million in 2019 to a peak of $14,146 million in 2022. However, in 2023, there is a decline to $12,579 million. This suggests strong sales growth in the initial years, followed by a drop in the most recent period examined.

Invested Capital

The invested capital exhibits a generally upward trend, increasing from $18,872 million in 2019 to a high of $21,233 million in 2020. It then slightly declines in 2021 and 2022 to levels around $19,700 million, before rising again to $20,411 million in 2023. This pattern indicates some fluctuations in capital investments, with an increase in the earlier years, a moderate reduction, and a subsequent recovery in the latest year.

Turnover of Capital (TO)

The turnover of capital demonstrates a fluctuating pattern. In 2019, the ratio is at 0.61, declining marginally to 0.58 in 2020. It improves significantly to 0.71 in 2021 and slightly increases further to 0.72 in 2022, reflecting enhanced efficiency in the use of capital during these years. However, the ratio drops again in 2023 to 0.62, indicating a reduction in capital turnover efficiency in the most recent year.

Overall, the data suggest that while the company experienced growth in net sales and invested capital during the earlier part of the period, both metrics encountered some setbacks in 2023. The turnover of capital aligns with these trends, showing increased efficiency during 2021 and 2022, followed by a decline in 2023. This could signal challenges in maintaining operational efficiency amidst fluctuating sales and capital investment levels.

Cash Operating Taxes

Cash operating taxes show significant fluctuations over the analyzed period. The value declined sharply from 494 million US dollars in 2019 to 192 million in 2020, followed by a notable rebound to 542 million in 2021. Subsequently, it slightly decreased to 523 million in 2022 and then declined more substantially to 313 million in 2023. These variations indicate considerable volatility in tax payments, potentially influenced by changes in profitability, tax regulations, or timing of tax settlements.

Net Operating Profit Before Taxes (NOPBT)

NOPBT experienced a generally increasing trend from 2019 through 2021, rising from 1,462 million US dollars to a peak of 2,630 million in 2021. However, this was followed by a decline to 2,067 million in 2022 and a more pronounced decrease to 1,130 million in 2023. The initial growth phase suggests robust operating performance, while the later downturn indicates challenges that may have affected earnings, such as market conditions or increased operating costs.

Effective Cash Tax Rate (CTR)

The effective cash tax rate exhibited notable variability across the years. Starting at 33.82% in 2019, it dropped substantially to 9.82% in 2020, then rose to 20.62% in 2021. The rate continued to increase to 25.31% in 2022 and further to 27.69% in 2023. This pattern suggests shifting tax burdens, possibly due to changes in tax legislation, deductions, or profitability mix, resulting in a lower tax rate during 2020 followed by a gradual normalization upwards.

Overall Insights

The data reflects a period marked by initial profitability growth followed by a decline, accompanied by fluctuating tax payments and a variable effective tax rate. The decline in NOPBT in the last two years correlates with reduced cash operating taxes, while the rising tax rate may indicate increased effective tax pressure despite lower profits. These patterns may point to evolving operational or external factors impacting financial performance and tax strategy.