Corning Stands by Flat Guidance

The company says returning to the black is its first priority.

Author:: Scott Moritz
Publish date:: Apr 22, 2002 4:39 PM EDT

Corning

met the first-quarter forecast it set a week ago and stood by its second-quarter forecast, saying its "first priority" is to return to profitability next year.

Though fiber shipments increased by as much as 15% from year-ago levels, the company says pricing pressure offset any gains from the sales. That resulted in sales plunging to less than half of year-ago levels.

The optical fiber cable and component maker reported a first-quarter loss of 10 cents a share on revenue of $898 million. A year ago, earnings were 14 cents on revenue of $1.9 billion.

As the company said last week, it plans to take a $600 million charge over the second and third quarters to cover the amount it overpaid for acquisitions and the cost of restructuring. The company expects its second-quarter loss to be flat with first-quarter levels on sales of $900 million to $925 million.

Corning's cash reserves dipped to $1.8 billion from $2.2 billion at the end of last year. The company said the cash was used in part to put $140 million toward debt repayment and $60 million toward restructuring.

"We are somewhat encouraged by the general direction of the results for the quarter," CFO James Flaws said. "Sales began to stabilize compared to the quarter-to-quarter declines last year. Unfortunately, the telecommunications market remains weak and continues to dampen our results."

The company plans to discuss earnings in a conference call Tuesday before the market opens.