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Corning Incorporated Profit Falls, but TV glass demand grows
By Steve Gavriliuc for CEOWORLD Magazine Updated:October 26, 2009
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Corning Inc. (NYSE:GLW) says demand continues to improve for glass used in flat-screen televisions, one of its key products. But the world’s largest maker of liquid-crystal-display glass says its third-quarter profit fell from a year ago as overall revenue slipped. Both it earnings per share and revenue beat Wall Street expectations, however.
Corning says it earned $643 million, or 41 cents a share in the July-September period. That’s down from $768 million, or 49 cents a share, a year earlier.
Excluding unusual items, its profit of 42 cents a share beat Wall Street’s forecast of 39 cents a share, AP reported. Sales in the Display Technologies segment were $679 million and slightly higher than the second quarter. Third-quarter sales were impacted by an earthquake in Japan that affected production at the company’s LCD facility in Shizuoka in August. Display sales were positively impacted by foreign exchange rate movements in the quarter.
In the third quarter, Corning began volume shipments of Gen 10 glass substrates from its newest LCD glass manufacturing plant in Sakai City, Japan. Corning is the first manufacturer of TFT-grade Gen 10 substrates in the world.
Telecommunications segment sales were $450 million, an increase of 3% over the previous quarter. The segment saw continued strength in optical fiber sales in China, as well as strong demand for private network products in North America. The growth rate was impacted by a slowing of fiber-to-the-home demand in North America.
Environmental Technologies segment sales were $167 million, an increase of 27% sequentially, driven primarily by automotive product sales increases in the United States, China, and Germany. Corning said the improved automotive product demand was likely the result of governmental incentives within these regions, including the now-ended
U.S. “cash for clunkers” program, and diminished global inventory levels. The company also experienced strong demand for its heavy-duty diesel products due to manufacturers purchasing product ahead of new 2010 U.S. emissions regulations.
Specialty Materials segment sales were $90 million, a 27% increase over quarter two. The sales increase was due in part to the continued ramp up in demand for Gorillaâ„¢ glass used in notebooks and portable electronic devices. Corning’s Gorilla glass is now used by 12 major brands and designed into more than 45 devices.
Life Science segment sales were $92 million, compared to $81 million in the second quarter. Third-quarter sales included $7 million from Axygen Bioscience, Inc., which was recently acquired by Corning.
Axygen’s product portfolio and established distribution network will significantly strengthen Corning’s life sciences platform. Corning’s equity earnings were $418 million and significantly higher than second-quarter equity earnings of $361 million. Equity earnings from Dow Corning Corporation were $92 million, an increase of 59% over the second quarter. Equity earnings from Samsung Corning Precision were $316 million, an increase of 7% sequentially.
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