Corning Says View Still Rosy
Corning (GLW) tempered views on the hot LCD market with lower-than-expected guidance, but it saw no inventory pile-up or demand slump.
"We are anticipating being right on track where we thought we would be for the full year," says Kate Asback, Corning's vice president of finance.
But investors, who had been hoping for a blowout year for Corning's liquid crystal glass business, now are likely to revive worries that the credit crunch may be dragging down consumer spending on luxury items like flat-screen TVs.
Shares of the Corning, N.Y., glassmaker fell 6% early Wednesday after the company reported strong third-quarter results but pegged fourth-quarter numbers below Wall Street's targets. Corning expects to post adjusted earnings of 37 cents a share on about $1.5 billion in sales for the December quarter, while analysts had forecast a 39-cent profit on sales of $1.62 billion.As a supplier to the flat-panel computer and TV manufacturers, Corning's LCD glass orders usually come three months before the finished products hit the stores, says Asback. "The top of the cycle was earlier this year," she says. Two factors may have limited the LCD growth this year, say analysts and industry watchers. For one, Corning refused to cut prices as much as it had in previous years. The price of LCD glass fell 8% from year-ago levels, far less than the 20% price drop at the same time in 2006, says Asback.
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