Wendell P. Weeks
Chairman & Chief Executive Officer at Corning
Thank you, Ann, and good morning, everyone. Today, we reported fourth quarter and full year 2021 results. We delivered another strong quarter of year-over-year growth. For the fourth quarter, sales were $3.7 billion, up 12% year-over-year. We generated EPS of $0.54 and free cash flow of $425 million. For the full year, sales were $14.1 billion, up 23% year-over-year. We generated EPS of $2.07, up 49% year-over-year. And we nearly doubled free cash flow. In addition, we achieved double-digit ROIC, we expanded our operating margin by 230 basis points, we increased our dividend by 9% and we reduced our outstanding shares by 5% through the resumption of share repurchases.
By leveraging our fundamental capabilities and our More Corning strategy, we are capturing a compelling set of short- and long-term opportunities across our portfolio. We are performing well in a challenging environment, and we have momentum entering the year.
Now all of that said, our gross margin is simply not where it should be. As we said last quarter, throughout the pandemic, we had prioritized protecting our people and delivering for our customers in a complex, inflationary environment. And it has come at a cost. Over the last several months, we have negotiated with customers to increase prices in our long-term contracts to more appropriately share the increased cost we are experiencing. We are focused on expanding our gross margin and expect improvement in 2022 as our sales grow and our price actions take hold throughout the year.
Last quarter, we also discussed our expectations for our Display business. I am pleased to report we had another strong quarter of Display revenues and profits in Q4. Display glass pricing is expected to be flat sequentially in the first quarter. The supply-demand balance for display glass is tight. In 2022, we expect overall glass supply to remain tight to balanced and the pricing environment to remain favorable.
This morning, you'll hear more on these and other priorities for 2022, our focus on how we intend to maintain our growth and positive momentum. Then Tony and Ed will discuss our results as well as our plan to enhance our profitability and overall financial strength.
So let's dive in. We've been delivering consistent growth. Sales have been up for six quarters in a row. Since 2019, we've grown sales by 21% and EPS by 18% with more balanced and consistent contributions across our businesses. Everything begins with our cohesive portfolio. We're the world leader in glass science, ceramic science and optical physics along with our four proprietary manufacturing and engineering platforms. We focus our strategy on capturing synergies among these capabilities and applying them to create disruptive innovations.
Across multiple industries, we work closely with many of the most influential and successful companies to bring our world-leading capabilities to bear on their toughest challenges. In the process, we help move the world forward.
As we partner with our customers to advance their visions, our probability of success increases as we combine our capabilities, reapply our talent and repurpose existing assets. This provides a powerful value creation lever by unlocking new ways to integrate more of our content into our customers' ecosystems. We aren't exclusively relying on people buying more stuff. We're driving more Corning content into the products they're already buying.
Our progress in 2021 illustrates the effectiveness of our approach, and it gives us confidence that we're building on a strong foundation for additional growth in 2022.
In Optical Communications, we've returned to growth with sales up 22% in 2021. And we expect strong growth to continue. Operators are expanding network capacity, capability and access. The pace of data center construction is accelerating as more applications move to the cloud and data creation continues to soar and fiber-rich wireless deployments are underway.
Meanwhile, governments around the world are initiating plans to extend the reach of broadband to more people in more places as network access is increasingly viewed as a human right. For example, the recently passed U.S. infrastructure bill allocates $65 billion in new spending for broadband infrastructure, including $42 billion for new network builds. Our customers are stating their preferences for fiber to build these networks. As the only large-scale end-to-end manufacturer of optical solutions, Corning plays a vital role in driving the continued expansion of connectivity. We're working even more closely with industry players at the regional and national levels, including expanding our longtime collaboration with AT&T.
Stepping back, we're at the beginning of a large, multiyear wave of growth for passive optical networks. Project momentum is strong across our customer base. And as U.S. infrastructure plans roll out, it could add as much as $1 billion a year to the market for four years starting as early as 2023. We believe private carrier and public infrastructure investments will push the market into double-digit growth over the next few years.
In Life Sciences, we're delivering growth on multiple fronts with sales up 24% in 2021. We're seeing ongoing demand in support of a global pandemic response. Our inventions are also helping the industry advance the transition to cell- and gene-based therapies. And we're making progress on our multibillion-dollar content opportunity in our pharmaceutical packaging business.
After introducing Valor Glass vials in 2017, we recently introduced Velocity Vials. These vials are helping industry-leading drugmakers increase efficiency and throughput to drive faster manufacturing of vaccines to help meet global demand. Velocity joins Valor and our glass tubing business as we build a comprehensive end-to-end pharmaceutical packaging portfolio. In fact, our portfolio has enabled the delivery of nearly 5 billion doses of COVID-19 vaccines so far. And earlier this week, West Pharmaceutical Services, a global leader in injectable drug administration, announced a long-term supply agreement and technology investment in Corning to enhance injectable drug packaging systems.
In automotive, 2021 sales in our Environmental Technologies segment increased 16% to reach an all-time high $1.6 billion despite weakness in the automotive market related to chip shortages. We're pursuing a $100-per-car content opportunity driven by trends that are reshaping the auto industry and reimagining the car. We delivered multiple proof points in 2021.
Daimler launched the Hyperscreen dashboard display in the Mercedes-Benz EQS. The display features a Gorilla Glass cover nearly five feet wide. Building on this momentum, we entered a new automotive product category with our Curved Mirror Solutions. This innovation is enabling the augmented reality head-up display in Hyundai's electric crossover, the Ioniq 5. And Jeep announced a product that brings our tough technical glass into their iconic vehicles. The new Jeep performance parts windshield featuring Gorilla Glass is now a factory-installed option on the Wrangler and Gladiator.
Additionally, tighter emissions regulations continue to provide a strong content opportunity for our environmental solutions. Our newest generation of gasoline particulate filters help vehicles, including hybrids, achieve even lower levels of fine particulate tailpipe emissions. The contributions of our GPF business provide a strong illustration of our More Corning strategy in action. Since 2017, Environmental Technologies sales have increased more than 40% while global car sales had decreased by 20%.
Let's turn to mobile consumer electronics, where 2021 sales increased 7%, and we surpassed the $2 billion in sales for the first time. Since 2016, Specialty Materials has added nearly $900 million on a base of $1.1 billion in a smartphone market that has been flat to down.
As we help our customers deliver new value to their users, more of our content is deployed in each device sold. That is another great illustration of More Corning in action. Our industry-leading innovations continue to garner widespread accolades. In fact, Fast Company named Corning the most innovative company in the consumer electronics category for 2021, touting Ceramic Shield, the world's first transparent and color-free glass ceramic, as "virtually indestructible" and recognizing Gorilla Glass Victus as the toughest Gorilla Glass yet. We continue to see strong demand for both of these premium products.
In 2021, more than 125 devices, including smartphones, wearables, tablets and laptops, launched featuring Gorilla Glass. And we expanded our capabilities into a new category by introducing Gorilla Glass with DX and DX+ to optimize mobile phone cameras. These composite products create an attractive opportunity to increase our revenue per device.
Finally, in 2021, Apple awarded Corning an additional $45 million from its Advanced Manufacturing Fund. To date, Corning has received $495 million in total from Apple's fund. We're investing in multiple new inventions and innovations for mobile consumer electronics, and we're excited about the potential in 2022 and beyond.
Turning to Display. Our leadership in large glass puts us in a position of strength. 2021 sales grew 17% to $3.7 billion. Our volume exceeded glass market growth as we ramped Gen 10.5 facilities that supply glass for large-sized TVs, which are expected to grow at a high teens compound annual growth rate over the next several years. In 2022, we expect overall glass supply to remain tight to balanced and the pricing environment to remain favorable. We continue to believe the retail market will grow, led by higher TV unit sales and growth in average screen size.
Across our markets, long-term growth drivers are strong, and our role is clear. We lead in capabilities that are vital to progress. Our approach provides exciting opportunities for Corning inventions to make a positive impact on the world. And it underscores our commitment to moving the world forward in everything that we do.
Now let me give you some examples outside of the operational context. In 2021, we hosted COVID-19 vaccination clinics at Corning sites around the world. In Reynosa, Mexico, for example, we helped administer more than 100,000 doses of vaccines and boosters to employees and community members. And we provided more than 200,000 diagnostic tests for employees around the world. We kicked off a five-year, $5.5 million partnership with the nation's largest historically black university, North Carolina A&T. Our work will prepare students for STEM careers.
We engaged our Board of Directors to provide guidance and resources to our Office of Racial Equality and Social Unity, utilizing our members' diverse experience, gender, age and ethnicity to advance this new initiative. We achieved gender pay equity globally for all salaried employees, and we expanded the reach of our DE&I office with regional business councils.
And finally, we committed to greenhouse gas goals that align with the Paris Agreement. And we signed solar contracts at Hemlock that will help the world address its renewable energy goals.
I feel very good about our efforts to bolster equality inside and outside the company and our progress on our sustainability initiatives. Overall, we continue to build a stronger, more resilient company. We're in the early innings of exciting industry transformations, and key trends are converging around our capabilities. You can see it in our results, you can see it in our outlook for 2022 and advancement of new businesses towards significant commercial sales over the next few years. Of course, to keep advancing during Corning's next 170 years, we must focus on growing and developing our leaders. We have a new generation who are stepping up to guide this company through a very exciting phase of its history into the future, and I'm working closely with each of them.
To that end, I want to recognize Tony as he prepares to hand over the reins to Ed in just a few weeks. The strong position we're in today certainly reflects the many contributions he has made throughout more than three decades of excellent service to Corning. Tony, we thank you and wish you the very best in retirement.
At the same time, I'm excited to welcome Ed into the CFO role, which he starts on February 18. Ed has long played a key role in the growth and financial strength of our company. Tony and I have worked closely with him during that time, and I look forward to the important contributions he will make in this new position.
So let me turn the call over to Tony and Ed, who will share more details on our results, our priorities and our outlook for 2022.
