By Ben Fox Rubin
Corning Inc. said it doesn't expect to face another quarter of
heavy price declines for its LCD glass, forecasting prices to drop
at a more moderate level in the second quarter.
The company, which relies on sales of LCD-TV glass for the bulk
of its profit, warned earlier this year that prices were expected
to drop sharply in the first quarter--which it reported Monday--due
in part to more competitive pricing from its rivals. Corning
suspected price declines would return to more moderate levels soon
after.
In the second quarter, Corning said it expects its LCD glass
volume to be up by a high single-digit percentage sequentially.
Specialty materials segment sales are expected to increase by 20%
to 25% sequentially, driven by significantly growing demand in
Corning Gorilla Glass, a material used in smartphones, tablets and
notebooks.
The company on Monday said first-quarter earnings slid 39% as it
posted higher expenses, masking a rise in revenue.
Corning reported a profit of $301 million, or 20 cents a share,
down from $494 million, or 33 cents a share, a year earlier.
Excluding acquisition-related costs and other items, core earnings
rose to 31 cents from 29 cents a share.
Sales improved 26% to $2.29 billion, while core sales were up
32% to $2.39 billion.
Analysts polled by Thomson Reuters predicted earnings of 30
cents a share on revenue of $2.3 billion.
Product costs rose 30%, and selling, general and administrative
costs jumped 53%.
Display technologies core sales were $1 billion, a 58% increase
from core sales of $650 million a year ago, primarily as a result
of the consolidation of Corning Precision Materials during the
quarter. Corning recently completed its acquisition of Samsung
Corning Precision Materials, which was a joint venture with Samsung
Display Co. that makes LCD glass in Korea.
"We are starting to benefit from the synergies we anticipated
with the consolidation of Corning Precision Materials, and, as LCD
price declines lessen, we expect improved results throughout the
year," Corning Chief Financial Officer James B. Flaws said
Monday.
Sales in the specialty materials segment were $261 million, a
slight increase from last year's first-quarter results.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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