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Corning Drops Phone

The glassmaker slides 9% as telecom sales drop.

Corning (GLW) - Get Corning Inc Report plunged 9% late Tuesday as a shortfall in the telecom business overshadowed the glassmaker's in-line guidance.

The display-glass and fiber-optic cable maker lost $32 million, or 2 cents a share, on sales of $1.2 billion. The latest quarter included a charge of $371 million, or 24 cents a share. Excluding that charge, Corning had a profit of $339 million, or 22 cents a share, meeting analysts' expectations.

A year ago the company made 12 cents a share on $1.03 billion in revenue.

In keeping with a theme started by



Tuesday, Corning saw no benefits from a

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telco budget flush. Sales of fiber-optic cable in the fourth quarter fell 10% sequentially to $193 million from $216 million in the prior quarter.

In November, Corning warned that it expected sales of its telecom fiber-optic cable and networking hardware to fall 10% to 15% sequentially from third-quarter levels.

Looking ahead, Corning expects to post an adjusted profit of about 22 cents a share on sales of $1.2 billion to $1.25 billion. Analysts surveyed by Thomson First Call expect EPS of 22 cents on $1.23 billion in revenue.

In its computer-monitor and flat-panel display business, Corning expects first-quarter volume growth between 3% and 8%. But the company cautioned in a press release Tuesday that display-glass price cuts will be "more significant than the company has experienced in recent quarters."

"We believe that increased volume and manufacturing cost efficiencies could allow us to offset the impact of price declines and lead to a first-quarter gross margin percent comparable to the fourth quarter of last year," said CFO Jim Flaws in the press release.

Corning said the fourth-quarter charge reflected a $443 million tax-expense charge, primarily to increase the valuation allowance against Corning's U.S. deferred tax assets and reducing those net deferred tax assets to zero. The quarter also included an after-tax gain of $84 million related to the release of translation capital in the final liquidation of a wholly owned foreign subsidiary.

Corning shares fell $2.15 to $22.87 in after-hours trading.