Corning Trims LCD View

Corning (GLW Quote) shares dipped slightly Monday after the company cut its forecast for liquid crystal display glass sales.

The LCD and fiber optic cable maker says it now expects glass volume to range between flat to a 5% sequential decline in the second quarter ending in June. Previously, the company had expected sequential volume to be somewhere between flat to 5% up for the quarter.

Despite the slip in shipments for glass used in TVs and computer monitors, Corning reaffirmed financial guidance for the quarter. The company expects an adjusted profit of about 25 cents a share on $1.31 billion in sales. Analysts are looking for pro forma earnings of 25 cents on $1.32 billion in revenue, according to Reuters Research.

The volume slowdown was due to surplus glass inventory held by the TV and computer monitor panel makers. The inventory levels should peak this quarter.

"We believe the level of inventory will decline in the third quarter of this year, following a pattern very similar to that of last year," the company said in a press release Monday.

The glut, which is mainly with the computer monitor segment, is not expected to have an impact on Corning's glass prices, the company says.

Most of the LCD weakness is expected to be offset by stronger sales of telecom gear. Corning predicts sequential sales to rise 15% to 20%. That is up from the 10% to 15% the company had previously forecast for the current quarter.

A power outage following the lighting strike in its Shizuoka, Japan, glass melting tank unit will likely cost the company about a penny a share. This impact is included in the 25-cent-a-share outlook for the second quarter.

Corning shares fell 15 cents to $24.35 in premarket trading Monday.