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Corning Retreats Most in Eight Weeks After Its Net Income Declines by 53%

Post Time:Jan 30,2012Classify:Company NewsView:366

Corning Inc. (GLW), the largest maker of glass for flat-panel televisions, declined the most in eight weeks in New York after saying glass prices contributed to a 53 percent drop in fourth-quarter profit and are still sinking.


Corning retreated 11 percent to $13.05 at the close, its biggest plunge since November. The stock has fallen 38 percent over the past 12 months.


Sales of flat-panel TVs, many of which use Corning’s glass, fell during 2011 at retailers such as Best Buy Co. Consumers are buying fewer TVs even as retail prices decline, Corning Chief Financial Officer James Flaws said today on a conference call. Component makers such as Corning have capacity that isn’t being used, Flaws said.


“The real concern for investors is what happens in the glass industry and how they deal with excess capacity,” said Alkesh Shah, an analyst with Evercore Partners Inc. in


Net income for Corning declined to $491 million, or 31 cents a share, from $1.04 billion, or 66 cents, a year earlier, according to a statement today. While profit excluding some items matched the 33-cent average estimate of 21 analysts surveyed by Bloomberg, the company also said that earnings from affiliates that accounted for more half of the pretax income would fall in the first quarter amid “significant” price declines.


Dow Corning


Corning said first-quarter earnings excluding some items may fall 5 percent to 20 percent from the previous quarter at the affiliates, including Dow Corning and Samsung Corning Precision Materials. The affiliates provided 58 percent of Corning pretax profit in the fourth quarter, according to today’s statement.

The company, based in Corning, New York, had cut its fourth-quarter forecast on Nov. 29, after price declines for liquid crystal display glass and the loss of a contract in


A Corning spokesman, Daniel Collins, said the company will disclose more details about its expectations for 2012 at an investor meeting on Feb. 3.


“It’s still going to be a tough year,” said Darice Liu, an analyst with Brigantine Advisors, citing uncertainty about the economy, in comments made before the earnings report.


Fourth-quarter sales for Corning advanced 6.9 percent to $1.89 billion, from $1.77 billion a year earlier. The average estimate of analysts was $1.85 billion, according to data compiled by Bloomberg.


The company makes glass and ceramic products, including glass panels for liquid crystal displays, Gorilla Glass found on smartphone touch screens, fiber-optic cables, industrial air filters, and life science equipment.

Source: www.bloomberg.comAuthor: shangyi

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