Corning Boosts TV View

It hits first-quarter targets and guides in line.
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Updated from 7:10 a.m.

Corning

(GLW) - Get Report

beat first-quarter targets and boosted its worldwide flat-screen TV sales forecast.

The Corning, N.Y., glassmaker earned $327 million, or 20 cents a share, for the quarter ended March 31, up from the year-ago $257 million, or 16 cents a share. Revenue rose to $1.31 billion from $1.26 billion a year earlier.

Excluding certain costs, latest-quarter earnings were 28 cents a share, 2 cents higher than the Thomson Financial analysts' consensus estimate.

Liquid crystal display glass sales fell 12% sequentially from the seasonally strong fourth quarter, but the decline was offset in part by solid sales in Corning's telecom unit. Strong demand for fiber cable pushed telecom sales up 9% sequentially in the first quarter.

"We see a general strength across the business," said vice president of finance Kate Asbeck referring to sales to telcos. "The business can grow," she added when asked if the performance could be repeated.

But flat screen TVs are still the big growth product for Corning. The company raised its volume forecast increase for the year to between 35% and 40%, up from a prior target of about 35%. The boost will come from a consumer preference for LCD TVs, says Corning.

"We now believe that this year's worldwide LCD TV penetration rate will increase from our original estimate of 33% to 36% of the color television market. In total, we expect approximately 73 million LCD televisions to be sold in 2007," finance chief Jim Flaws said in a press release. Corning's previous estimate was 68 million LCD, or liquid crystal display, televisions.

Flaws said that the company expects second-quarter sales to be in the range of $1.40 billion to $1.45 billion and EPS in the range of 30 to 33 cents a share before special items, with gross margin in the range of 45% to 47%. Analysts were looking for a profit of 29 cents a share on sales of $1.42 billion.

Corning anticipates that its second-quarter sequential LCD volume growth will be in the range of 8% to 12%. Corning said it is continuing its new pricing strategy in the second quarter. As a result, the company's price decline guidance is unchanged.

Corning shares rose $1.07, or 4%, to $24.80 in pre-market trading Wednesday.