GLW Corning Inc

Corning Inc.'s (GLW) reported its fourth-quarter profit slumped 53% and said it plans to cut capacity in its liquid-crystal-display glass business, as weak demand is leading to "significant" price declines.

Lackluster television demand has created a massive headwind for electronics retailers, set manufacturers and suppliers like Corning, the world's largest maker of LCD glass for TVs. Struggling panel makers with excess supply have been able to negotiate for steep price declines. Corning is hoping it can restore balance by cutting output, but the company acknowledged the environment has hurt its performance.

"These price declines are a reality, and they've lowered the profitability of our key businesses," Corning Chief Financial Officer Jim Flaws said in an interview. "We have ways to stop the price declines, and it remains to be seen if those will work."

Flaws said price declines will be significant in the first quarter, and the company isn't expecting much sequential change in the overall glass market in the period. Corning expects supply-and-demand to come back in line later in the year.

Equity earnings in the first quarter are expected to decline 5% to 20%, excluding special items, due to lower earnings at its ventures with Samsung Electronics Co. (SSNHY, 005930.SE) and Dow Chemical Co. (DOW).

The company last year slashed its profit forecast for the fourth quarter, citing deeper-than-expected declines in LCD glass prices and a unnamed South Korean customer that had backed out of part of a sales contract.

Corning posted a profit of $491 million, or 31 cents a share, compared with $1.04 billion, or 66 cents a share, a year earlier. The year-earlier period included a $326 million credit. Excluding items such as restructuring and other impairments, per-share earnings fell to 33 cents from 46 cents.

Revenue increased 6.9% to $1.89 billion. Analysts surveyed by Thomson Reuters expected earnings of 33 cents a share on revenue of $1.85 billion.

Gross margin widened to 43.7% from 43.5%.

Display technology sales, the company's largest revenue driver, jumped about 4% to $780 million.

Shares fell 8.7% to $13.35 in recent premarket trading. Through the close, the stock is up 6.6% in the past three months.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com

--Mia Lamar and Lauren Pollock contributed to this report.

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