Earnings Preview: Corning to report 3Q results

AP News
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Posted: Oct 29, 2010 1:24 PM
Earnings Preview: Corning to report 3Q results

Corning Inc., the world's biggest maker of glass for flat-panel televisions and computers, reports its third-quarter results before the stock market opens Monday.

WHAT TO WATCH FOR: Steady year-over-year growth in the liquid-crystal-display glass market as retail sales of LCD TVs remain strong. Analysts also anticipate a rapid expansion in Corning's Gorilla business as the ultra-strong glass looks poised to migrate from cell phones and computer tablets to high-end TVs.

The glass pioneer expects LCD glass volume will slip 5 percent from an unusually high plateau in the second quarter. Some Asian panel makers have been moderating production to avoid an inventory buildup. The company had previously forecast that volume would remain flat.

The slowdown is pressuring Corning to yield on pricing and could dampen its fourth-quarter outlook.

Corning expects to sell 2.9 billion to 3.1 billion square feet of LCD glass this year, up from 2.45 billion square feet in 2009. The ultrathin, unvaryingly smooth glass generates the bulk of its profits and revenue, which reached $5.4 billion in 2009.

The company has high hopes for Gorilla, a highly popular protective sheath for mobile devices. After generating $80 million in revenue in 2009, the business might pick up its first profit in 2010. Soaring demand could boost sales of the scratch-resistant glass to $1 billion next year.

WHY IT MATTERS: As LCD-TV market penetration in the U.S. reaches 90 percent, China will become the global leader in total TV sales _ some 70 percent of them LCD models. Corning projects the Chinese market could rise 32 percent this year to 37 million LCD-TVs. It already plans to build an $800 million, advanced LCD glass plant in Beijing, with operations to start in the first half of 2012.

Based in western New York, Corning also makes auto-pollution filters and is the world's largest producer of optical fiber and cable. It employs 24,500 people.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, expect Corning to earn 52 cents per share on revenue of $1.61 billion.

LAST YEAR'S QUARTER: Corning reported net income of $643 million, or 41 cents a share, on sales of $1.48 billion.

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On the Net: http://www.corning.com