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Corning Stock Falls on Q3 Earnings Miss Due to Chip Shortage

Corning says lower production in the auto industry due to the chip shortage cut into profit.

Corning  (GLW) - Get Corning Inc Report fell Tuesday after the glass and specialty materials maker missed Wall Street's third-quarter earnings expectations, as lower auto production due to the chip shortage bit into profit.

Shares of the Corning, N.Y., company at last check were off 3.8% to $37.14.

Corning reported net income of $371 million, or 43 cents a share, down from $427 million, or 48 cents a share, in the year-earlier quarter. Adjusted profit came to 56 cents a share, short of the FactSet consensus of 58 cents a share.

Revenue totaled $3.62 billion, up from $3 billion a year earlier, while the FactSet consensus called for revenue of $3.63 billion.

Lower production in the automotive industry due to the semiconductor shortage reduced earnings by 2 cents a share and sales by about $40 million.

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"The automotive industry was significantly impacted by the semiconductor chip shortage as [original equipment manufacturers] extended shutdowns due to production constraints, and Corning's automotive sales and profitability were down as a result," the company said.

Corning said it expects profitability in the fourth quarter to decline slightly on a sequential basis due to further reductions in automotive-industry-related sales and lower Corning Gorilla Glass sales following large product launches by customers.

Chief Financial Officer Tony Tripeny said in a statement that the company incurred additional costs that were elevated by inflation. 

"To help offset these costs, we have price increases underway in all of our businesses," Tripeny said.

Chairman and Chief Executive Wendell Weeks said that for the full year, Corning was on pace to reach $14 billion in sales and more than $2 of earnings per share.

Wall Street is looking for earnings of $2.13 a share on $14.02 billion in revenue.