slashed its third-quarter guidance Wednesday, saying a longer-than-expected supply chain correction forced it to reduce its estimates.
The Corning, N.Y., glass and ceramic-products maker said it now expects third-quarter earnings to fall in a range of 43 cents to 45 cents a share, before special items, on sales between $1.58 billion and $1.62 billion.
The previous third-quarter projection called for earnings of 48 cents to 51 cents a share on revenue of $1.65 billion to $1.72 billion, which Corning provided in its second-quarter earnings report nearly a month ago.
The revised expectation is well below Wall Street's target for earnings of 49 cents a share on revenue of $1.69 billion. Since the company originally offered its third-quarter outlook, analysts have upped their EPS and revenue estimates by 0.5%, according to Thomson Reuters.
Corning was sinking $1.80, or 9.2%, to $17.70 in early trading. For the year, its shares are down nearly 20%.
Chairman and CEO Wendell Weeks, addressing an investor conference in New York, said Corning's guidance reductions are primarily related to lower-than-expected shipments of LCD glass in the company's display business.
The supply chain correction, as outlined in our second-quarter conference call, is taking longer than we expected," Weeks said in prepared remarks. "We believe that the set assembly portion of the supply chain built too much inventory in the first half of this year. As set assemblers have continued to hold back on orders, panel makers have lowered prices and reduced utilization rates to balance the supply chain."
During a phone interview with
after the company's second-quarter earnings results , Corning's senior vice president of finance, Kate Asbeck, acknowledged that the company was seeing a normal supply chain correction.
"What we have seen in the last several weeks is a decline in some shipments, as well as some utilization rates running high," Asbeck said on July 30. "Panel makers now are lowering their production levels so that they don't end up with extra inventory levels. This is something that is fairly normal."
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