The glassmaking giant beat analysts' estimates for the second quarter and guided in line for the third. But the liquid-crystal glass supplier squashed hopes for a major sales blowout amid consumers' strong desires for big TVs.
"We were happy with our performance led by a strong quarter in our display business," Corning Vice President of Finance Kate Asbeck said in an interview. Asbeck said that at the midpoint of this year, the company is ahead of where it was last year and "has a lot of momentum going into the back half."
But while the company pegs third-quarter volume growth at its liquid-crystal display business to be somewhere between 10% and 15% over second-quarter levels, there was no change to the full-year volume growth target of 35% to 40%.
Asbeck says stronger-than-expected display glass sales in the second quarter may have been a decision by panel makers to get an early start on building their supplies and not necessarily a sign of bigger full-year sales.
"We are keeping our eye on the end market," says Asbeck. "If demand is stronger, we're not sure the capacity is there to deliver beyond the current" forecast.
In other words, at this point, Corning is not expecting a big upside to sales even if demand for big flat-screen TVs and computer monitors grows, because the production capacity is limited.
In the second quarter ended last month, Corning earned $489 million, or 30 cents a share, down from the year-ago $514 million, or 32 cents a share. Sales rose 13% from a year earlier to $1.42 billion.
Corning's adjusted profit was 34 cents a share. Analysts surveyed by Thomson Financial were looking for a 32-cent profit on sales of $1.44 billion.
Looking ahead, the company said it expects adjusted earnings of 34 cents to 37 cents a share for the third quarter, on sales of $1.525 billion to $1.575 billion. Analysts project a 36-cent profit on sales of $1.55 billion.
Corning shares fell $1.19 to $25 in premarket trading Wednesday.