Thank you for joining Corning's Annual Meeting of Shareholders. Please welcome Corning's Chairman of the Board and Chief Executive Officer, Wendell Weeks.
Good morning, and welcome to Corning Incorporated's 2024 Annual Meeting of Shareholders. I'm Wendell Weeks, Chairman of the Board of Directors and Chief Executive Officer. With me here today are Linda Jolly, Vice President and Secretary of the Corporation, and Lewis Steverson, Executive Vice President and Chief Legal and Administrative Officer. Thank you all for joining us here today. As is our custom, we will conduct the business portion of the meeting first, and then answer questions at the end. You may ask a question by submitting it in the Q&A section on the web portal. Please feel free to submit questions now. While we may not have time to answer every question, we will address any relevant, unanswered questions on our investor relations website after the meeting. If we receive multiple questions on the same or a similar topic, we will consolidate those questions and answer them together.
It is now shortly afternoon, Eastern Daylight Time on May second, and this meeting is officially called to order. Now, I would like to introduce the members of the board at today's meeting. Mr. Donald Blair, Mr. Leslie Brun, Dr. Stephanie Burns, Mr. Richard Clark, our Lead Independent Director, Ms. Pamela Craig, Mr. Robert Cummings, Mr. Roger W. Ferguson Jr., Mr. Thomas French, Ms. Deborah Henretta, Dr. Daniel Huttenlocher, Mr. Kurt Landgraf, Mr. Kevin Martin, Dr. Deborah Rieman, Mr. Hansel Tookes, and Dr. Mark Wrighton. I would like to extend my gratitude to Dick Clark for his 12 years of service, including 11 years as our lead independent director. He will be retiring after today's meeting. I also want to thank Don Blair for his decade of service to the board, and I'd like to congratulate Dr.
Stephanie Burns, who will assume the role of Lead Independent Director immediately after this meeting. We're also joined today by representatives of PricewaterhouseCoopers, our independent public accounting firm. And finally, the company has appointed Broadridge Financial Solutions to act as Inspector of Election. Ms. Linda Piscadlo has taken the oath of Inspector of Election and will be tabulating the vote. After the formal meeting is adjourned, I'll make some brief remarks about your company, and then we'll have time for a few questions. Just to note, any votes cast during today's meeting will not be included in this morning's preliminary vote, but they will be included in the official vote reflected in Corning's SEC filing. Now I'll ask Ms. Jolly to report on our quorum and other matters.
Thank you, Mr. Chairman. The Board of Directors fixed March 5, 2024, as the record date for this meeting. Notice of the meeting was provided on March 22, 2024, to all shareholders of record as of the record date. The Inspector of Election has determined that a quorum is present, and a list of shareholders is available for inspection on the web portal.
Thank you. Now I'll present the matters to be voted upon. Please note, that we will give shareholders an opportunity to comment on the proposals after all proposals have been presented. The proposals will be presented in the order outlined in the proxy statement. Proposal 1 is the election of 14 director nominees to a one-year term. Proposal 2 is the advisory vote to approve the compensation of our executive officers, as described in the proxy statement. Proposal 3 is the ratification of the Audit Committee's appointment of PricewaterhouseCoopers as Corning's independent registered public accounting firm for 2024. If any shareholder would like to make a comment regarding any of the proposals, please submit your comment through the web portal. The polls are now open.
Any shareholder who has not voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have already voted do not need to take any further action. Now that everyone has had the opportunity to vote, I declare the polls for Corning Incorporated's 2024 Annual Meeting of Shareholders closed. Ms. Jolly, do we have the preliminary voting results?
We do. The Inspector of Election has informed us that the preliminary vote report shows the 14 director nominees have been duly elected, the compensation of the named executive officers has been approved by advisory vote, and the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2024 has been ratified. We will report the final results on a Form 8-K to be filed with the SEC in the next few days.
Thank you. There being no further business to come before the meeting, Corning Incorporated's 2024 Annual Meeting of Shareholders is now adjourned. That concludes the formal portion of our annual meeting of shareholders. Now, I'd like to shift gears and talk to you about how your company is doing. Today's remarks will include some forward-looking statements, and actual results may differ materially. You can find detailed risk factors in our most recent 10-K and also on Corning's website. You should also be aware that we use certain non-GAAP financial measures and performance indicators to assess Corning's financial and operating performance. You can find a reconciliation between GAAP and non-GAAP measures on our website. Long-standing shareholders know that life-changing innovation is our purpose and drives everything we do.
The essence of what we do at Corning is invent, make, and sell innovations that make the world just a little bit better. We drive durable, multi-year growth by inventing category-defining products, developing scalable manufacturing platforms, and building strong, trust-based relationships with customers who are leaders in their industries.
At the start of 2023, we introduced plans to improve profitability and cash flow. Throughout the year, we took action to restore our productivity ratios to historical levels, and we raised prices to more appropriately share inflation with our customers. Our results demonstrate that we continue to make solid progress, advancing market leadership, strengthening our profitability, and improving our cash flow generation, even in the lower demand environment that we are experiencing. This week, we released first quarter 2024 financial results. Sales were nearly $3.3 billion, and EPS was $0.38.
Year-over-year, gross margin grew 160 basis points to 36.8%, and free cash flow improved by $300 million. These results were at the high end of our guidance. More importantly, we're seeing encouraging signs of improving market conditions. We continue to expect that the first quarter will be the lowest quarter for the year, as our higher profitability and cash flow base continue to improve. As our markets improve, we expect to grow by more than $3 billion in annualized sales in the midterm, which we define is within the next 3 years. As we capture this growth, we expect to deliver powerful incrementals. We already have the required production capacity and technical capabilities in place, and the cost and capital are already reflected in our financials. This is a tremendous opportunity for our shareholders.
We expect our sales to grow from here, and we have reflected this in our second quarter guidance. Our positive outlook for each of our market opportunities results from our strong leadership positions and the power of the secular trends that we're addressing through innovation and close collaboration with customers. There's a lot more Corning to be had in each of our markets. These include broadband, 5G, cloud computing, and artificial intelligence and optical communications, increased screen sizes in display technologies, tighter emission regulations that drive more and better filtration in environmental technologies, and the need for more advanced cover materials in mobile consumer electronics. We are committed to making the world a better place, not only with our innovations, but also with our actions.
Corning strengthens the economy and enhances the quality of life in the communities where we live and work, with investments that include support for libraries, daycare centers, schools, arts and cultural organizations, economic development initiatives, and infrastructure improvements. In 2024, we will build on our progress while continuing our mission to create life-changing innovations. I'm grateful to our shareholders for being on this journey with us.... Thank you for your investment in Corning and your participation in our governance process. Now, we would like to open things up for shareholder questions and comments. Again, we will attempt to answer as many questions as time allows, and any relevant questions that we do not get to will be addressed on our company website. If we receive questions on the same or similar topic, we'll consolidate those questions and answer them together. Lewis, have we received any shareholder questions?
Yes, we have. The first question is: Will Corning be reducing its investment and spending in RD&E?
No. Our commitment and investment in research, development, and engineering remains unwavering. We invest between 7% and 8% of our annual sales in RD&E, about $1 billion every year, and it's this sustained commitment, in good times and bad, that enables us to deliver life-changing innovations and capture near- and long-term growth opportunities. So we remain committed to RD&E as a centerpiece of our strategy.
Thank you. We have one more question. You have great products. Why has the stock price languished over these past years?
This is an excellent question. Our market positions and our products continue to do excellently in each of our markets. The challenge has been that all of our markets, sort of post-pandemic, are operating well below trend. So even though our market positions continue to be strong or even stronger than they were, the overall revenue opportunity in these markets is temporarily compressed. We expect that our markets will return to trend, and you see that in our quarter two guidance. That is the core of our $3 billion of opportunity that I laid out in my comments, and with it, will come very powerful incrementals for our shareholders. And then with that, we would expect to see our stock price get back to where it should be.
Thank you. There are no further questions, Chairman.
That concludes the Q&A portion of the meeting. Thank you again for joining us today.
This now concludes the meeting. Thank you for joining, and have a pleasant day.