Specialty glass maker Corning Inc. said Wednesday its first-quarter profit fell 8 percent, largely because of a higher tax rate. But its revenue surged 24 percent on robust sales of glass for flat-screen televisions, computers and mobile devices.
The results beat Wall Street expectations. Its shares rose 1.5 percent in afternoon trading.
The world's largest maker of liquid-crystal-display glass said its net income fell to $748 million, or 47 cents per share, in the January-March period from $816 million, or 52 cents per share, a year ago.
The company attributed the decline mainly to an increase in its tax rate to 13 percent from 3 percent last year. The earnings were still 3 cents a share higher than analysts surveyed by FactSet had expected.
Revenue jumped to $1.92 billion from $1.55 billion a year ago. Analysts expected $1.8 billion.
Corning saw year-over-year and sequential growth in all five of its business units _ from LCD-TV and Gorilla cover glass to ceramic auto-pollution filters, research labware, and optical fiber and cable.
"We are succeeding at building a bigger, more balanced company," Corning's chief financial officer, Jim Flaws, said in a conference call with analysts. "We strongly believe that every one of our segments will have significant growth this year and over the next several years."
Revenue from Corning's display technologies segment, its biggest business, edged up 1 percent to $790 million, with LCD glass volume rising 5 percent as predicted. The company expects glass volume to be similar in the April-June quarter, then rise markedly in the seasonally stronger second half.
DisplaySearch, a market-research firm in Austin, Texas, estimates that 217 million LCD-TVs will be shipped worldwide in 2011, up 13.2 percent from 2010. In North America, shipments are expected to rise 5.8 percent to 40.5 million units.
In the United States and Europe, "economic improvement helps a little bit but TV demand is relatively robust even in down economies," DisplaySearch analyst Paul Gagnon said.
In contrast, the vigorous growth seen in emerging markets such as China, India and Eastern Europe "mainly has to do with prices having fallen to an absolute level that's attractive enough to encourage swapping of CRTs (traditional cathode-ray-tube TVs) for LCD TVs," he said.
While Corning commands more than 60 percent of the LCD glass market, the 159-year-old company is also the world's largest producer of optical fiber and cable. Based in western New York, it employs 26,000 people.
Revenue in Corning's telecommunications unit jumped 30 percent to $474 million on higher demand for fiber-to-the-home products in North America and Europe. The company said it churned out more optical fiber in March than in any month in its history.
Propelled by ultra-strong Gorilla glass, which is now migrating from handheld and tablet devices to high-end TVs, specialty materials revenue more than doubled to $254 million.
Corning has said sales of Gorilla glass could surge to $1 billion this year from $250 million in 2010. Sony Corp. is incorporating Gorilla glass in a new line of Bravia TVs this spring. Invented in 1962, Gorilla found commercial use only in 2008. LG Display Co. and Asahi Glass Co. make competing products.
Environmental technologies revenue jumped 35 percent to a record $259 million, driven by an 81 percent jump in sales of diesel-vehicle filters.
Life-sciences revenue rose 21 percent to $144 million, reflecting Corning's acquisition of Axygen BioScience Inc. as it shifts beyond a heavy focus on display glass. It bought the maker of plastic labware and liquid handling products for research labs for about $400 million in September 2009.
Corning shares rose 31 cents to $20.91 in afternoon trading but had traded as high as $22.05 earlier in the day. It is still closer to the upper end of a 52-week range of $15.45 to $23.43.