Corning Forecasts Weaker 3Q
CORNING, N.Y., July 30, 2008 -- Specialty glass and ceramics maker Corning Inc. today announced second-quarter net income of $3.2 billion, up from $489 million a year ago thanks to one-time tax-related gains and strong market demand for LCD TV and computer glass, but its third quarter predictions fell below what Wall Street analysts were forecasting.
Earnings per share for the second quarter were $2.01, including a $2.4 billion special gain primarily related to deferred tax asset valuation allowances. Excluding the one-time gain, earnings per share were 49 cents, up 44 percent over last year and in line with expectations.
While sales for the quarter reached $1.69 billion -- a 19 percent increase over one year ago -- some analysts were predicting sales of $1.72 billion.
“Despite concerns of a US economic slowdown, Corning performed very well in the second quarter. We saw continued strong demand for our LCD glass substrates throughout the quarter. The US retail data reported by the NPD Group’s (an independent consumer market research firm) retail tracking service for the month of June showed retail sales of LCD TV units up 35 percent year over year. This is consistent with what we’ve seen in the first half of the year where LCD TV units sold increased 37 percent over a year ago,” said Corning Chairman and CEO Wendell P. Weeks.
Display Technologies segment sales were $809 million, down 2 percent from last quarter but up 33 percent from one year ago. The company said the results were negatively affected by a manufacturing glitch that impacted shipments during the quarter to one customer, reducing its sales for the quarter by $24 million. Also affecting net income was the weaker-than-expected yen-to-dollar exchange rate, the company said.
Corning said sales in the third quarter are expected to be in the range of $1.65 billion to $1.72 billion, an increase of 6 to 11 percent over the third quarter last year. That estimate falls short of Wall Street projections of $1.79 billion. Corning said the weaker yen is expected to reduce third quarter sales and net income by $30 million.
The company said it expects the LCD glass market to grow 25 to 30 percent this year because retail demand for LCD products remains strong.
Weeks said the company was also pleased with the second-quarter performance of its Telecommunications segment, where sales were up 13 percent to $477 million. Corning said the increase was driven by strong fiber-to-the-premises demand as well as overall strength in optical fiber sales.
Corning also announced today a plan to repurchase up to $1 billion of its stock through 2009.
For more information, visit: www.corning.com
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