ROCHESTER - Corning Inc. said Wednesday its second-quarter profit surged thanks to a hefty one-time tax gain and strong demand for glass used in flat-screen televisions and computers.
But it forecast third-quarter sales below Wall Street expectations, and its shares dropped 4 percent.
The world's largest maker of glass for liquid crystal display televisions and PCs, based in Corning in western New York, also said it will buy back up to $1 billion, or about 3 percent, of its outstanding stock by the end of 2009.
Quarterly net income climbed to $3.2 billion, or $2.01 a share, from $489 million, or 30 cents a share, a year earlier. Excluding a $2.43 billion tax-related gain and other items, profit was in line with Wall Street's 49-cent-per-share forecast.
Sales rose 19 percent to $1.69 billion from $1.42 billion, falling shy of the $1.72 billion in sales forecast by analysts surveyed by Thomson Financial.
U.S. sales of LCD-TVs have been up more than 30 percent year-over-year in the first half and are still expected to grow between 25 percent and 30 percent this year even as the nation's economy falters, the company said.
“We expect the total year to still come in where we thought it would,” Chief Executive Wendell Weeks said in a conference call with analysts. “We don't see any reason to change our strategies.”
However, Corning forecast third-quarter profit of 48 cents to 51 cents per share, excluding special items, with sales projected to grow 6 percent to 11 percent to $1.65 billion to $1.72 billion. While the profit forecast represents 26 percent to 34 percent growth year-over-year, the sales estimate falls below Wall Street's projections of $1.79 billion.
Shares fell 85 cents to close at $20.47. The stock has traded in a 52-week range of $19.31 to $28.07.
Corning said its display technologies sales jumped 33 percent to $809 million from $610 million, and sales in its telecommunications unit rose 9 percent to $477 million on strong optical fiber sales.
Environmental technologies sales also rose 9 percent to $209 million from $191 million, fueled by its diesel pollution-filter business.
Corning said its display unit's sales were hurt by a manufacturing interruption that affected shipments to one of its customers, reducing second-quarter revenue by about $24 million and profit by $16 million. In addition, some panel makers, mostly in Taiwan, slowed their purchase orders this month to try to reduce a buildup in inventories as prices fall, the company said.
Despite this “normal supply chain correction,” retail sales of LCD televisions remain on track worldwide in 2008, said Katherine Asbeck, Corning's senior vice president of finance.
“We continue to feel very good about our estimate of 105 million LCD televisions being shipped this year and that that will cause the glass market to grow at the upper end of our original guidance range of 25 to 30 percent,” Asbeck said in an interview.
“Despite all of the economic issues we're seeing in the United States, sales of LCD televisions at retail, both in the U.S. and around the world, just continue to be very strong.”
DisplaySearch, a market research firm based in Austin, Texas, expects 104.9 million LCD-TVs will be shipped worldwide this year, up 32 percent from 79.3 million in 2007. In North America, shipments could grow almost 25 percent from 24.2 million to 30.2 million this year.
In 2008, projected annual shipments of LCD-TVs will edge those of conventional TVs for the first time, analyst Paul Gagnon said.
“We've only been selling LCD-TVs in any kind of substantial volume for maybe five years, so there's still a lot of homes that have yet to adopt one,” he said.
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On the Net:
www.corning.com
AP-ES-07-30-08 1736EDT
The world's largest maker of glass for liquid crystal display televisions and PCs, based in Corning in western New York, also said it will buy back up to $1 billion, or about 3 percent, of its outstanding stock by the end of 2009.
Quarterly net income climbed to $3.2 billion, or $2.01 a share, from $489 million, or 30 cents a share, a year earlier. Excluding a $2.43 billion tax-related gain and other items, profit was in line with Wall Street's 49-cent-per-share forecast.
Sales rose 19 percent to $1.69 billion from $1.42 billion, falling shy of the $1.72 billion in sales forecast by analysts surveyed by Thomson Financial.
U.S. sales of LCD-TVs have been up more than 30 percent year-over-year in the first half and are still expected to grow between 25 percent and 30 percent this year even as the nation's economy falters, the company said.
“We expect the total year to still come in where we thought it would,” Chief Executive Wendell Weeks said in a conference call with analysts. “We don't see any reason to change our strategies.”
However, Corning forecast third-quarter profit of 48 cents to 51 cents per share, excluding special items, with sales projected to grow 6 percent to 11 percent to $1.65 billion to $1.72 billion. While the profit forecast represents 26 percent to 34 percent growth year-over-year, the sales estimate falls below Wall Street's projections of $1.79 billion.
Shares fell 85 cents to close at $20.47. The stock has traded in a 52-week range of $19.31 to $28.07.
Corning said its display technologies sales jumped 33 percent to $809 million from $610 million, and sales in its telecommunications unit rose 9 percent to $477 million on strong optical fiber sales.
Environmental technologies sales also rose 9 percent to $209 million from $191 million, fueled by its diesel pollution-filter business.
Corning said its display unit's sales were hurt by a manufacturing interruption that affected shipments to one of its customers, reducing second-quarter revenue by about $24 million and profit by $16 million. In addition, some panel makers, mostly in Taiwan, slowed their purchase orders this month to try to reduce a buildup in inventories as prices fall, the company said.
Despite this “normal supply chain correction,” retail sales of LCD televisions remain on track worldwide in 2008, said Katherine Asbeck, Corning's senior vice president of finance.
“We continue to feel very good about our estimate of 105 million LCD televisions being shipped this year and that that will cause the glass market to grow at the upper end of our original guidance range of 25 to 30 percent,” Asbeck said in an interview.
“Despite all of the economic issues we're seeing in the United States, sales of LCD televisions at retail, both in the U.S. and around the world, just continue to be very strong.”
DisplaySearch, a market research firm based in Austin, Texas, expects 104.9 million LCD-TVs will be shipped worldwide this year, up 32 percent from 79.3 million in 2007. In North America, shipments could grow almost 25 percent from 24.2 million to 30.2 million this year.
In 2008, projected annual shipments of LCD-TVs will edge those of conventional TVs for the first time, analyst Paul Gagnon said.
“We've only been selling LCD-TVs in any kind of substantial volume for maybe five years, so there's still a lot of homes that have yet to adopt one,” he said.
---
On the Net:
www.corning.com
AP-ES-07-30-08 1736EDT
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