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Corning to spend $20 bln on buybacks, dividend, M&A though 2019

Post Time:Oct 28,2015Classify:Company NewsView:302

Oct 27 (Reuters) - Corning Inc, the supplier of Gorilla Glass for iPhones, said it plans to spend about $20 billion through 2019, half on share buybacks and dividend and half on R&D and acquisitions.

The company also reported third-quarter core earnings that met analysts average estimate.

However, Corning's stock was volatile on Tuesday, falling when the market opened and then reversing course to trade up nearly 5 percent at $18.18 by afternoon.

Corning increased its share buyback program by $4 billion, including a $1.25 billion accelerated buyback in the current quarter, and plans to increase its dividend by at least 10 percent each year through 2019.

The company said it plans to spend about $10 billion on capital investments, R&D and acquisitions through 2019, with its M&A plans mainly focusing on its optical communications business.

The unit makes fiber optic cables and connectors, and one of Corning's bigger acquisitions recently, that of Samsung Electronics' fiber optics unit, was to boost the business.

While Corning is best known for the hardy scratch-resistant Gorilla Glass used in smartphones, a majority of its revenue comes from making LCDs and other displays for TVs.

A drop in LCD glass volumes and prices hit results in the third quarter and Corning said it expects a fall in the current quarter as well, compared with the preceding quarter.

The company's net income slumped to $212 million, or 15 cents per share, in the three months ended Sept. 30, from $1.01 billion, or 72 cents per share, a year earlier.

The steep drop was because of foreign currency hedging losses in the latest quarter, compared with a gain last year.

Corning's core profit, which excludes certain items, was 34 cents per share.

Core net sales fell 5.1 percent to $2.45 billion, also hurt by a strong dollar.

Analysts on average had expected a profit of 34 cents per share and revenue of $2.50 billion, according to Thomson Reuters I/B/E/S.

Dow Chemical Co last week suggested it might buy Corning's stake in their silicon joint venture. Corning said on Tuesday it was in talks with Dow and that the venture, Dow Corning Corp, was outside its "core focus".

Dow Corning, formed in 1943, produces silicon-based products for aerospace, automotive and electrical industries.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila and Savio D'Souza)

Source: http://finance.yahoo.com/news/corning-spend-20-blnAuthor: shangyi

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