Home > News > Company News > Earnings preview: LCD glass lifts Corning

Earnings preview: LCD glass lifts Corning

Post Time:Oct 23,2009Classify:Company NewsView:370

ROCHESTER, N.Y. — Specialty glass maker Corning Inc. reports its results for the third quarter on Monday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Corning, the world's biggest maker of liquid-crystal-display glass for flat-panel televisions and laptops, has been on a bumpy ride over the last year. It eliminated 3,500 jobs in January after recession-jittery panel makers slashed purchases to reduce a buildup in inventories. But retail sales of LCD-TVs held steady and demand for Corning's ultra-thin glass rebounded midway through the first quarter. Second-quarter glass volume doubled over the first quarter at its wholly owned business and rose 50 percent at its joint venture with South Korea's Samsung Electronics Co. In July, Corning raised its 2009 estimate of worldwide glass sales to 2.3 billion square feet from 2 billion square feet in 2008.

Corning expects third-quarter volume at its wholly owned business will be down less than 5 percent from the second quarter. It previously forecast a decline of 5 percent to 10 percent after an earthquake in August cut production in Shizuoka, Japan. Volume at its joint venture will still be flat to slightly higher, it said. The disruption will cut sales by about $25 million and result in $22 million in charges.

LCD glass is Corning's biggest business by far. It also makes ceramic auto-pollution filters and is the world's largest maker of optical fiber and cable. Based in the city of Corning in western New York, it employs about 26,000 people.

In line with its strategy to shift from a heavy focus on one colossal cash cow product, Corning acquired Axygen BioScience last month for about $400 million to broaden its life sciences division. Axygen makes plastic labware and liquid handling products for research labs. The buyout should enable Corning to push its life-sciences revenue above $500 million by 2011 from $326 million in 2008.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect, on average, third-quarter earnings of 39 cents a share on revenue of $1.42 billion. That would be down from 46 cents a share on sales of $1.56 billion in the third quarter of 2008.

ANALYST TAKE: UBS analyst Nikos Theodosopoulos upgraded Corning to buy from neutral, projecting an upside to LCD demand this year and next on strong holiday sales of LCD-TVs in China. He also sees a better balance in LCD supply and demand. In a note to investors, Theodosopoulos said the LCD industry has "reached a level of maturation" — unlikely to post breakout growth but also not likely to disappoint. He expects Corning to post earnings of $1.60 per share in 2010, up from a previous estimate of $1.58. Analysts surveyed by Thomson Reuters expect $1.50, on average.

WHAT'S AHEAD: Corning expects a "material" hit to LCD glass volume in the fourth quarter because of a recent power outage at its factory in Taichung, Taiwan. Glass volume could match that of the third quarter or be down slightly. Before the outage, it had expected an increase of as much as 5 percent.

STOCK PERFORMANCE: Corning shares edged down 0.4 percent in the quarter.

Source: googleAuthor: shangyi

Related News

Hot News

返回顶部