CORNING, N.Y., June 1, 2006 -- Corning Inc. executives told financial analysts and investors, at two separate conferences last week, that sequential liquid crystal display (LCD) glass volume for its Display Technologies segment, including Samsung Corning Precision Glass Co. Ltd., is expected to be flat to down as much as 5 percent. It had previously forecast sales would be flat to up 5 percent. The company said there there is no change to its previously disclosed guidance on glass pricing.
Corning's Senior Vice President-Finance, Katherine A. Asbeck, addressed investors at the Lehman Brothers Worldwide Wireless, Wireline and Media Conference in New York, and Wendell P. Weeks, president and CEO, was a presenter at the 34th Annual JP Morgan Technology Conference in San Francisco.
"The change in our display segment volume guidance is the result of a reduction in orders from some of our customers, which we believe was caused by the previously disclosed panel inventory build-up, particularly for desktop monitors, which began near the end of last quarter," Asbeck and Weeks said in a company statement. "We expect panel inventory levels, as measured in days of inventory, to peak in the second quarter.
"The important news here is that the end market trends for LCD remain favorable," Asbeck said. "We still anticipate the LCD glass market volume to grow between 40 percent and 50 percent for the year and that Corning will grow faster than the market. For the first half of this year, we expect our volume growth to be around 70 percent in comparison to last year."
Corning said it expects LCD TV penetration for the year to average 19 percent and, based on its revised end-market data, and has raised its forecast of total LCD televisions shipped into the retail market to 41 million for the year, up from its previous expectation of 38 million.
In addition, the company announced that most of the glass melting tanks impacted by a lightning strike at its LCD plant in Shizuoka will be back on line at the beginning of June.
"As a result, there have been no material interruptions of glass supply to customers," Corning said. "As previously announced, the repair and other costs incurred as a result of the power outage will impact Corning's second-quarter earnings by about $0.01 per share. This impact is included in Corning's earnings per share guidance of $0.24 to $0.26 per share, before special items."
The company reaffirmed its previously announced second-quarter guidance of $1.29 billion to $1.33 billion in sales and earnings per share (EPS) in the range of $0.24 to $0.26 before special items.
Corning also said that if the US dollar continues to weaken, it will have a favorable impact on its Display Technologies segment results.
Telecommunications segment sales are expected to increase by 15 to 20 percent, from the previous guidance of 10 to 15 percent for the quarter, Corning said. The anticipated increase in sequential telecommunications sales in the second quarter will be driven by higher-than-expected demand from US and European carriers for the company's fiber, cable, hardware and equipment products.
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