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Corning Sees 1Q Profit, Improved Glass Demand

Post Time:Mar 20,2009Classify:Company NewsView:250

Corning Inc. (GLW) expects to be profitable this quarter amid rebounding demand for glass as the liquid-crystal-display maker benefits from strong global sales of LCD televisions.

It's a surprising turn for the positive after the pessimistic tone set by the Corning, N.Y., company in January after its fourth-quarter report. At the time, it said it expected a roughly breakeven quarter excluding one-time items. The first quarter was expected to be the low point for Corning.

"With LCD glass recently contributing about 90% of Corning's net income, this represents a major turning point in the company's fundamentals," said Needham analyst John Harmon. He upgraded the stock to buy from hold.

Corning shares rose 1% to $12.63. The stock reached a 52-week high in May of $28.07 a share and bottomed in November at $7.36 before rising consistently since then.

Despite slumping retail sales, Corning noted that research firms show strong LCD TV sales around the world, with unit sales rising 39% and 30% in the U.S. and Japan, respectively, in February. Europe and China saw even stronger gains for January, the latest data available.

As such, Corning sees its glass volume falling now more than 5% from the first quarter, not the 25% drop previously expected. It also projected a profit, excluding items, without being more specific. The company had seen itself barely breaking even, well below analysts' then-estimates.

Corning said its other business - which include providing fiber-cables to telecommunications providers - continue to feel the impact of the economic weakness.

Amid the woes, the company announced in January it would cut its work force by 13%, or 3,500 people.

Source: wsj.comAuthor: shangyi

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