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Eye on Corning

Earnings will show whether it was sandbagging.

Corning (GLW) - Get Corning Inc Report fans have come to expect big things.

The company has said it expects to see sales decline in its first quarter, due to a seasonal change in buying patterns. But bullish investors see a brighter picture.

We will find out who is right Wednesday before the market opens, when the glassmaking giant reports its financial results.

The company had set expectations rather low for the quarter during its analysts' day in February, calling for a 10% to 15% decline in liquid crystal display glass volume during the slowest season of the year for TV and computer monitor sales.

But analysts are optimistic, especially about the growth of large flat screen TV sales. Some say the downward guidance is merely a sandbagging effort by management allowing the company to easily clear a low earnings bar.

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"We see the LCD sector as being in better shape than management had previously guided on its last earnings call, which may provide some upside to our revenue estimate," CIBC analyst Jeff Osborne wrote in a preview report Thursday.

Also at the analyst conference in February, Corning vowed to hold strong on price cuts in the first half of this year, keeping declines in the 1% to 2% range. The hardline policy on pricing is expected to help Corning avoid the margin-crushing price war that usually accompanies the slump in LCD demand after the holidays.

In February, Corning said it expected to make 24 cents to 27 cents a share on revenue of $1.26 billion to $1.31 billion. Analysts expect adjusted profit of 26 cents a share on $1.3 billion in sales, according to Reuters Research.

One investor, who likes the stock, says the company's LCD business and its sales of fiber optic cable and equipment to telcos "looks good." But it's next quarter that remains a concern, he says.

"I think this quarter should be OK," says the money manager. But "I'm unsure about June guidance."

But whatever the outlook is, you can be sure that some optimists might see it as another round of sandbagging.