Corning Inc. (NYSE:GLW)

Return on Assets (ROA)

The ROA values are missing for the first three quarters of 2019 and begin from the quarter ending March 31, 2020. The ROA shows an initial decline from 3.32% in March 2020 to a low of 0.73% in September 2020, indicating reduced asset profitability during that period. Subsequently, there is a recovery trend, with ROA increasing to a peak of 6.74% in September 2022. Following this peak, the ROA gradually declines through 2023, reaching values around 2.0% by the quarters ending December 2023 and March 2024. This pattern suggests a period of improved asset efficiency followed by a weakening towards the most recent quarters.

Financial Leverage

Financial leverage exhibits a relatively stable trend throughout the entire period. Starting at 2.01 in March 2019, it shows a slight upward drift, peaking at 2.55 in September 2022. There are minor fluctuations around this level, but overall leverage remains within a narrow range, approximately between 2.0 and 2.55. This stability suggests consistent use of debt relative to equity without significant shifts in capital structure risk.

Return on Equity (ROE)

ROE data begin from March 2020 and show an initial low of 1.68% in September 2020. A strong upward trend follows, reaching a peak of 17.06% in September 2022. This indicates a period of increasing profitability from the shareholders’ perspective. After this peak, ROE declines steadily throughout 2023, dropping to approximately 5.0% by the end of the year and slightly improving to 5.47% in the first quarter of 2024. The trend reflects a pronounced profitability cycle with growth and contraction phases.

Summary of Trends

The financial ratios indicate two main phases: one of improvement in profitability ratios (ROA and ROE) from 2020 to late 2022, followed by a decline in profitability in 2023 into early 2024. Financial leverage remains mostly stable, suggesting that changes in profitability are not primarily driven by significant shifts in debt usage. The decoupling in the later periods, where ROE decreases alongside a steady financial leverage, implies that operational performance likely influenced the profit reduction rather than capital structure adjustments.

Net Profit Margin

The net profit margin demonstrated considerable fluctuations over the periods analyzed. Starting with an absence of data prior to March 31, 2020, the margin began at 8.35% and experienced a decline to 1.89% by September 30, 2020. This was followed by a gradual recovery, peaking at 13.73% in September 2022. Subsequently, there was a steady decrease in profitability margins, reaching approximately 4.62% by the latest period of March 31, 2024. This trend indicates initial volatility, a phase of robust profitability, and a recent moderation in profit margins.

Asset Turnover

Asset turnover ratios were relatively stable and showed a mild upward trend from the earliest record at 0.4 around March 31, 2020, increasing towards 0.5 by December 31, 2022. After this peak, the ratio slightly declined again but maintained a level above 0.44 through March 31, 2024. This indicates a modest improvement in the efficiency with which the company has utilized its assets to generate sales over time, followed by a slight normalization in recent quarters.

Financial Leverage

Financial leverage ratios showed a gradual increase from 2.01 at the beginning of the period (March 31, 2019) to around 2.55 by September 30, 2022. Following this peak, the leverage ratio slightly decreased but remained relatively stable around 2.46 through March 31, 2024. This pattern suggests that the company increased its use of debt or equity financing selectively over the years, maintaining a moderate leverage level in the most recent period.

Return on Equity (ROE)

Return on equity exhibited notable volatility during the timeframe under review. Starting without data until March 31, 2020, ROE initially stood at 7.44%, then decreased sharply to as low as 1.68% by September 30, 2020. A pronounced recovery followed, culminating at 17.06% in September 2022, marking the highest point in the period. After this peak, ROE trended downward, stabilizing between roughly 5% and 7% by early 2024. The fluctuations in ROE correspond closely with movements in net profit margin and financial leverage, reflecting variable profitability and capital structure effects affecting shareholder returns.

The analysis of the financial ratios over the reported periods reveals several key trends and fluctuations in operational efficiency, profitability, and financial structure.

Tax Burden

The Tax Burden ratio shows moderate variability, starting at 0.79 in the earliest available period and fluctuating between 0.68 and 0.94 before stabilizing in the range of approximately 0.74 to 0.8 in recent quarters. This indicates some variation in the effective tax rate impacting net income but no extreme volatility.

Interest Burden

Interest Burden exhibits a declining trend from 0.85 to a low of 0.52, followed by a recovery to around 0.89, and a gradual downward movement back toward 0.69 by the latest period. The initial drop could suggest increased interest expenses or reduced operating income, while later periods indicate improvement in covering interest obligations.

EBIT Margin

The EBIT Margin has experienced notable fluctuations. After a decline to a low of 4.8% during mid-2020, it peaked at above 19% around late 2021 before entering a downward trend. Recently, margins settled in the 8.5%-9.3% range, pointing to reduced operational profitability compared to peak levels but an improvement over the lowest points.

Asset Turnover

Asset Turnover ratios have been relatively stable with a mild upward trend over time. Beginning near 0.36 to 0.4, this ratio improved to approximately 0.5 in the early 2022 period, followed by a slight decline to 0.44-0.45 recently. This suggests a modest increase in the efficiency of asset utilization with minor variation.

Financial Leverage

Financial leverage ratios demonstrate a slow but steady increase from just above 2.0 to peaks near 2.55, before slightly retreating to about 2.46. This indicates a cautious increase in leverage, implying more use of debt relative to equity over time, yet the ratio remains comparably stable in the latter periods.

Return on Equity (ROE)

ROE has shown significant volatility, initially dipping below 2% in mid-2020, then recovering sharply to reach peaks above 17%. However, recent quarters depict a downward trend with ROE around 5%, suggesting diminished returns to shareholders compared to the recent highs. This volatility in ROE corresponds with movements in EBIT margin and leverage, reflecting underlying operational and financial dynamics.

Overall, the data indicate that the company experienced a period of operational challenges around 2019-2020, followed by improved profitability and efficiency during 2021. More recently, there has been a softening in profitability measures, though asset utilization remains relatively efficient and leverage stable. These trends emphasize the company's exposure to variable economic or market conditions affecting earnings and capital structure management.

The analysis of the quarterly financial metrics reveals discernible trends in profitability, efficiency, and asset utilization over the period under review.

Net Profit Margin

The net profit margin data starts from a value of 8.35% in March 2020, followed by a decline to a low of 1.89% in September 2020. Thereafter, it shows a general upward trajectory reaching a peak of 13.73% in September 2022, indicating improving profitability. From this peak, the margin slightly declines over time, stabilizing around 4.5% to 4.96% by the first quarter of 2024. This pattern suggests periods of margin compression, recovery, strong gains, and consolidation.

Asset Turnover

Asset turnover remained relatively stable, beginning at 0.4 in March 2020 and experiencing a slight decline to 0.36 by December 2020. From that point, it generally improved, increasing steadily to a high of 0.5 in December 2022. Following this peak, it tapered modestly to approximately 0.44-0.45 through early 2024. These movements indicate a moderate enhancement in asset efficiency over the medium term, with a recent slight downward adjustment.

Return on Assets (ROA)

ROA exhibits a pattern broadly similar to that of net profit margin, beginning at 3.32% in March 2020 and declining to a low of 0.73% in September 2020. It then shows a progressive increase, peaking at 6.74% in September 2022. Subsequently, ROA decreases to about 2.04-2.22% in early 2024. The ROA trend corroborates the profitability and asset utilization dynamics, mirroring phases of contraction, growth, and stabilization.

In summary, the financial indicators demonstrate a period of initial downturn around mid-2020, with subsequent improvements peaking in late 2022. Following these highs, the company experienced some decline and stabilization in profitability and asset efficiency metrics through early 2024. These trends suggest that external or internal factors impacted performance during 2020, followed by a recovery phase leading to enhanced profitability and asset use before recent moderation.

Tax Burden

The tax burden ratio begins at 0.79 in March 2020, subsequently declining to a low of 0.68 in June 2020. It then fluctuates moderately between 0.74 and 0.82 in the following quarters, demonstrating relative stability with a slight downward tendency towards the end of the analyzed period, finishing at 0.75 in March 2024.

Interest Burden

Interest burden shows a notable decline from 0.85 in March 2020 to 0.52 in September 2020, suggesting increased interest expenses or reduced operating income during that period. Afterward, it rises sharply to approximately 0.89 by December 2021, indicating improved interest expense management or increased earnings before interest and taxes. A consistent downward trend is observed from the first quarter of 2022 through March 2024, ending at 0.71, reflecting some pressure on operating profits due to interest costs in recent quarters.

EBIT Margin

The EBIT margin records a substantial decrease in 2020, dropping from 12.49% in March to as low as 4.8% in September, highlighting margin compression likely due to adverse business conditions. However, strong recovery is visible through 2021, peaking above 19% by the end of the year. In 2022, margins remain robust above 17% before declining steadily in 2023 to a low around 8.5%. The margin slightly recovers by March 2024 to 9.3%, indicating some stabilization after the noted volatility.

Asset Turnover

Asset turnover maintains a relatively stable range throughout the period. Starting from 0.4 in early 2020, it trends upward modestly to peak at 0.5 in September 2022. A gradual decline follows in 2023, stabilizing around 0.44–0.46 towards March 2024. The modest fluctuations suggest steady asset utilization with minor efficiency gains in mid-period and slight decreases in the most recent quarters.

Return on Assets (ROA)

ROA is initially low at 3.32% in the first quarter of 2020, dropping to a trough of 0.73% in September 2020, reflective of the challenging economic environment. A strong rebound occurs in 2021 with ROA rising above 6.7% in late 2021 and maintaining above 6% through much of 2022. However, a notable decline unfolds through 2023, resulting in ROA near 2% by the end of that year. This suggests that despite recovery efforts, asset profitability faced headwinds recently, showing some minor improvement by March 2024 to 2.22%.

Tax Burden

The tax burden ratio began to be reported from March 31, 2020, showing a value of 0.79 and exhibited some fluctuations over the analyzed periods. It dropped to a low of 0.68 in June 2020, recovered to a peak of 0.94 in December 2020, then generally stabilized around the 0.75 to 0.81 range in the following years. More recently, from March 2023 to March 2024, the ratio maintained a steady level near 0.75 to 0.78, indicating relative consistency in the impact of taxes on earnings during these quarters.

Interest Burden

The interest burden ratio was first available at March 31, 2020, starting at 0.85. It declined sharply to 0.52 by September 2020 but recovered afterward. From late 2020 through mid-2022, the ratio remained high, between 0.84 and 0.9, suggesting lower interest expenses relative to earnings. From late 2022 into 2023 and early 2024, the ratio showed a gradual downward trend, declining modestly from 0.86 to around 0.69-0.71, indicating a relatively increasing proportion of interest expenses during this period.

EBIT Margin

The EBIT margin experienced significant volatility, starting at a modest 12.49% in March 2020 and dropping to a low 4.8% in September 2020. Following that, it rebounded sharply, peaking at 19.43% in September 2022. After the peak, the margin declined substantially in the subsequent quarters, falling to a range of approximately 8.53% to 9.3% by early 2024. This indicates a period of strong operational profitability in mid-2021 to late 2022, followed by a notable contraction in operating efficiency or margins.

Net Profit Margin

The net profit margin mirrored some of the volatility seen in EBIT margin but at a lower absolute level, starting at 8.35% in March 2020 and dipping to a low of 1.89% in September 2020. It then increased considerably, reaching a high of 13.73% in September 2022. Subsequently, the margin decreased steadily over the following quarters, dropping to around 4.5%-4.96% in the first quarter of 2024. This pattern indicates that net profitability saw considerable recovery after the initial decline but faced pressures in the most recent periods, reflecting either increased costs, lower revenues, or a combination of both factors.