Updated from Jan. 22
posted solid fourth-quarter results and boosted first-quarter guidance Thursday.
Once a leading maker of optical gear for telecom networks, Corning has recently shifted its focus to liquid crystal displays and environmental products. With those businesses posting strong returns and Corning's balance sheet returning to health, the once-flaccid stock surged over the last year, outperforming even the broad tech market revival. On Friday, Corning rose 22 cents to $13.12, putting it more than 200% above its 52-week low.
For the fourth quarter ended Dec. 31, Corning posted a loss of $29 million, or 2 cents a share, narrower than the year-ago charge-heavy loss of $1.12 billion, or 96 cents a share. Revenue jumped to $820 million from $736 million a year earlier.
The latest-quarter loss included restructuring charges amounting to 6 cents a share. Before the charges, the fourth-quarter profit was 4 cents a share, in line with the Thomson First Call analyst consensus estimate.
The company also boosted first-quarter guidance, projecting a pro forma profit of 4 or 5 cents a share on revenue of around $795 million. The Wall Street estimate called for a 4-cent profit on revenue of $774 million. Pro forma numbers exclude certain charges.
Corning said first-quarter telecom segment sales will sink 10% due to seasonal optical-fiber pricing reductions, lower project and services sales, and the company's final exit from the photonics business. Sequential optical fiber volume for the first quarter is expected to be stable.
Last May, Corning got rid of much of the optical-component business that had made it a turn-of-the-century telecom favorite.
In that deal, Corning and rival
actually paid consolidator
to take on those businesses. Shares in Avanex and
have ridden this year's telecom rally to new heights.
Some investors have set their sights accordingly. "Corning is a company. As long as there isn't too much of an expectation on their rampup, they'll be OK," says Jeff Pittsburg of Pittsburg Research, Great Neck, N.Y. He has no position in the stock.
For its part, Corning expects to continue to be sold out in LCD glass in the first quarter, despite bringing on additional capacity. Sequential LCD glass volume growth should be about 5% to 10% with current capacity constraints. Pricing for the first quarter should remain stable.
"We anticipate demand for flat-screen monitors to remain robust in 2004," finance chief James Flaws said. "LCD television is now in the early stages of acceptance and continuing demand is expected to double market penetration this year. We continue to invest in next generation large panel manufacturing, and we will bring additional Generation 6 manufacturing capacity on line this quarter and Generation 7 production later in the year."
Corning said ended the year with $1.3 billion in cash and short-term investments, down from the previous quarter's balance of $1.4 billion. The decline included debt repayments of approximately $95 million, restructuring payments of $32 million and an additional voluntary contribution of $60 million to the company's pension fund. For the year, Corning paid off approximately $1.4 billion in total debt and reduced its debt-to-capital ratio to 33.8% from the year-earlier 46.7%.
Corning rose 23 cents in postclose action.