Corning Sees Sales Slumping

Citing declining LCD glass demand, specialty glass maker Corning Inc. has withdrawn its previously disclosed financial guidance for the fourth quarter and for 2009.

"Panel makers, particularly those in Taiwan, have continued to reduce the utilization of their factories heading into the second half of this quarter in response to weakened retail demand for LCD televisions and desktop monitors. Demand in our wholly owned display glass business has dropped more precipitously than we expected just a few weeks ago. We are also seeing additional, but less severe, reductions in demand at Samsung Corning Precision Glass Co. Ltd., our equity company in Korea," said Corning Vice Chairman and CFO James B. Flaws at the UBS Technology Conference Tuesday.

Flaws said the company expects its fourth quarter sales to be below its guidance range of $1.2 billion to $1.3 billion, and earnings per share to be at the low end or below the 20 to 28 cents it had forecast.

"The retail environment and the LCD supply chain are both extremely uncertain. As a result, since the display business is a significant contributor to our overall results, we are unable to offer revised guidance for the fourth quarter or for 2009 at this time," Flaws said.

Flaws said the company will further reduce its LCD glass manufacturing capacity in the fourth quarter, with a resulting impact on gross margins in the Display Technologies segment and the company overall. Corning is also cutting spending by scaling back some manufacturing operations, curbing the rate of growth in research, development and engineering expenses, and reducing overhead.

"The latest economic news indicates that we may be facing a prolonged global recession. However, we believe that Corning's strong financial position will allow us to endure an extended downturn in the economy," Flaws said, adding that Corning has $3.2 billion in cash and short-term investments and $1.5 billion in debt.

For more information, visit: www.corning.com