DOW JONES NEWSWIRES
Corning Inc.'s (GLW) first-quarter net income plunged 99% due to
slumping sales and restructuring charges, but the company said
demand is increasing for its liquid-crystal display products,
particularly televisions.
Shares rose 1.6% premarket as the company expects "significant"
improvement this quarter.
Last month, in a surprising turn after the pessimistic tone set
by its fourth-quarter report, the maker of LCD glass and
fiber-optic equipment said it expected to be profitable in the
first quarter as demand for glass benefited from strong global
sales of LCD TVs.
Monday, Corning increased its estimate for this year's LCD glass
market to a range of 2.1 billion to 2.2 billion square feet from 2
billion, driven by stronger-than-expected demand for LCD TVs. It
expects LCD TV units to increase 18% this year, double Corning's
prior forecast. However, it said demand for laptops is weaker than
expected.
Chairman and Chief Executive Wendell Weeks said the company is
pleased to see continued strength of LCD TV sales at retail stores
worldwide despite slumping retail sales overall. He said the pickup
in demand for Corning's glass came sooner than expected, boosting
sales and earnings.
As such, Chief Financial Officer James Flaws said some
manufacturing operations should refire sooner than expected because
of an anticipated increase in volume. He said Corning should see
"considerable improvement" in display-segment results and gross
margin this quarter.
The company posted first-quarter net income of $14 million, or 1
cent a share, down from $1.03 billion, or 64 cents a share, a year
earlier. Excluding such items as restructuring charges and a
prior-year gain, earnings fell to 10 cents from 44 cents.
Revenue slumped 39% to $989 million, helping push gross margin
down to 27.3% from 52.2%.
Analysts surveyed by Thomson Reuters expected earnings of 5
cents a share on revenue of $963 million.
Revenue in the display-technologies segment slumped 57%, while
the telecommunications segment, which includes fiber-optic cable,
reported an 8.6% drop.
Overall, Flaws said earnings, sales and margins should show
"significant" growth from the first quarter. Analysts expected
earnings of 15 cents a share and revenue of $1.08 billion.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com