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Corning Profit Beats Estimates on TV Glass Demand

Post Time:Nov 02,2009Classify:Company NewsView:429

Corning Inc., the world’s biggest maker of glass for flat-panel televisions, posted third-quarter profit that beat analysts’ estimates and forecast an increase in glass volume as demand of TVs picks up.

Profit, excluding some costs, was 42 cents a share, the Corning, New York-based company said today in a statement. Analysts estimated 39 cents on average, according to a Bloomberg survey. Sales dropped 4.9 percent to $1.48 billion, also exceeding estimates.

Demand for glass is recovering after the recession sapped consumer spending and led to four straight quarters of falling revenue at Corning. Global sales of liquid-crystal display TVs will probably increase 20 percent to 156 million next year, leading to “robust gains” in glass volume, Corning projected.

“We really see no lack of enthusiasm around the world for this product,” Chief Financial Officer Jim Flaws said in an interview, referring to LCD TVs. He said Corning may also benefit from demand for cheaper laptop computers called netbooks. “It’s a great opportunity.”

Corning fell 14 cents to $15.51 at 4 p.m. in New York Stock Exchange composite trading. The stock has gained 63 percent this year.

Analysts had projected third-quarter sales of $1.43 billion on average. For this quarter, they are predicting a 32 percent jump in revenue.

Glass Demand

The global glass market will expand about 15 percent next year, Corning predicted. The company said notebook-computer sales will probably increase 20 percent in 2010, further boosting glass shipments.

This quarter, Corning projects its glass volume will be little changed or drop “slightly” from the previous quarter. The company’s production was hurt by a power disruption at a Taiwan plant.

Sales from the telecommunications division will probably decline 15 percent this quarter, Corning projected. Revenue from the life-sciences unit will increase 25 percent, it said.

Corning bought Axygen Bioscience Inc. for about $410 million last month, as it seeks to expand beyond display glass, which accounts for about half of sales. Its life-sciences unit, making up about 6.2 percent of revenue, makes lab products including slides and cell dishes.

Third-quarter net income slid to $643 million, or 41 cents a share, from $768 million, or 49 cents, a year earlier. The company said in January it would cut 3,500 jobs this year, or 13 percent of its workforce, to reduce costs.

Source: www.bloomberg.comAuthor: shangyi

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