Corning Hits Profit Target, but Sales Miss

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fell short of analysts' second-quarter revenue targets Wednesday and warned that sales could once again come up light in the third quarter.

The Corning, N.Y., glass and ceramics products maker said it had a profit of $3.21 billion, or $2.01 a share, in the second quarter, up from $489 million, or 20 cents a share, in the year-ago period. Results included a $2.43 billion tax-related gain. Excluding that item, Corning had a profit of 49 cents a share.

Sales reached $1.69 billion in the quarter, up 19% from the year-ago quarter and 5% sequentially. The increase came as Corning's Display Technologies' glass volume increased 26% year over year. The segment's sales topped $809 million, up 33% from the year-ago period, but down 2% sequentially.

On average, analysts expected Corning to notch a profit of 49 cents a share, excluding items, on revenue of $1.71 billion, according to Thomson Reuters.

"Despite concerns of a U.S. economic slowdown, Corning performed very well in the second quarter," said CEO Wendell Weeks in a press release. "We saw continued strong demand for our LCD glass substrates throughout the quarter."

Looking ahead, Corning expects third-quarter earnings to fall in a range of 48 cents to 51 cents a share, before items, on sales between $1.65 billion and $1.72 billion. Wall Street is looking for earnings of 50 cents a share on revenue of $1.79 billion.

Corning was lately sliding $1.03, or 4.8%, to $20.30. Among related stocks,


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slipped 0.7%, while



rose 1.3%.

During a telephone interview, Corning's senior vice president of finance Kate Asbeck said that company is seeing what she called a normal supply chain correction. Additionally, retail data have remained strong despite worries about the strength of the economy, she said.

"What we have seen in the last several weeks is a decline in some shipments, as well as some utilization rates running high," said Asbeck. "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."

Asbeck added that the fear of a panel shortage earlier in the year has led to a build now, although anecdotally, retail activity has remained strong and prices for LCD televisions should come down approaching the back-to-school season.

"Sales of LCD televisions were up 35% in June, and 37% in the first half," Asbeck said. "What we're seeing in the data through June, sales of televisions over 40 inches have remained relative consistent."