Corning Tops Profit, Sales Estimates

Shares are rising 2.5%.
By Robert Holmes ,

Corning

(GLW) - Get Report

topped analysts first-quarter expectations on the top and bottom line Tuesday, aided by strength in the LCD television display business.

The Corning, N.Y., glass and ceramics products maker said it had a profit of $1.03 billion, or 64 cents a share, in the first quarter, up from $327 million, or 20 cents a share, in the year-ago period. Results included a $327 million gain related to the pending Pittsburgh Corning Corporation bankruptcy proceeding. Excluding that gain, Corning had a profit of 44 cents.

Sales reached $1.62 billion in the quarter, up 24% from the year-ago quarter but only 2% higher sequentially. Corning's Display Technologies' glass volume increased 50% year over year and 2% sequentially. Samsung Corning Precision Glass, or SCP, volume was flat sequentially and increased 46% year over year.

Analysts expected Corning to notch a profit of 42 cents a share, excluding items, on revenue of $1.59 billion, according to Thomson Financial.

"This was a tremendously strong quarter for Corning," said CEO Wendell Weeks in a press release. "Display glass demand remains robust, and we continue to operate our LCD glass substrate facilities at full capacity. The global consumer appetite for LCD televisions continues to grow."

Looking ahead, Corning expects second-quarter earnings to fall in a range of 47 cents to 50 cents a share, excluding items, on sales between $1.71 billion and $1.75 billion. That would beat Wall Street's expected earnings of 43 cents a share on revenue of $1.67 billion.

"Global demand for LCD televisions and laptop computers remains strong going into the second quarter," said CFO James Flaws. "We continue to closely monitor the U.S. retail market, but we have not seen any indication that the U.S. slowdown is impacting our LCD glass business."

At the company's annual meeting on Thursday, Weeks observed that the LCD TV market has

grown faster than Corning has predicted

and that the current market forecast model may be too conservative.

Corning was lately up 2.5% to $26.32. Among related stocks,

Cisco

(CSCO) - Get Report

added 1.5%, and

Syntax-Brillian

(BRLC)

was down 5.

Alcatel-Lucent

(ALU)

, meanwhile, rose 2.8%.

During a phone interview with

TheStreet.com

, Corning's senior vice president of finance, Kate Asbeck, said it was difficult for the company to comment on the impact of the U.S. economic stimulus rebate checks,

which are on their way to taxpayers this week

.

"We track the end-market retail data fairly closely, and we have not seen any impact of the slowdown in the U.S.," Asbeck said. "It's difficult for us to say whether it's the cool new technology or if it's the stimulus checks. Clearly, we're seeing consumers continuing to buy televisions although the economy has slowed."

When asked about what could derail Corning's sunny forecast for the second quarter, Asbeck said the company closely monitors short-term metrics, such as monthly shipment data and monthly panel prices published by customers including Samsung.

"Short term, what can cause a change in the business is an inventory build," she said. "When that happens, panel makers will drop prices suddenly to move that inventory. What adds to our confidence is that, right now, we don't see any inventory build of any significance. As we look at panel prices, our customers are not lowering their prices significantly at all. We perceive things to be very healthy."

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