Corning earns $611M in 2Q

Specialty glass maker Corning GLW said Monday it earned $611 million in the second quarter, topping Wall Street's expectations on a resurgence in demand for its flat-screen television glass.

The world's largest maker of liquid-crystal-display glass said its profit in the April-June period fell sharply from $3.2 billion, or $2.01 a share, a year earlier when it recorded a one-time gain of $2.43 billion. Excluding special items, however, its profit of 39 cents easily beat Wall Street's forecast of 32 cents a share.

Sales fell 18% to $1.4 billion from $1.69 million but also exceeded analysts' forecasts of $1.36 billion.

Sales in its display technologies segment fell 17% to $673 million from $809 million a year ago but surged 89% from $357 million in the first quarter.

DisplaySearch, a market-research firm based in Austin, Texas, estimates that about 127 million LCD-TVs will be shipped worldwide this year, up from 105 million in 2008. In North America, shipments were expected to edge up to 31.5 million from 30.1 million last year.

"Even in North America, on a unit basis, demand has been pretty good," said analyst Paul Gagnon. "People seem to be gravitating toward more modest screen sizes, not the ultra-large stuff, but the volume is there."

Corning said LCD glass volume rose 66% from the first quarter, up from earlier predictions of 40-to-50% growth in the quarter. Volume doubled in its wholly-owned business and jumped 50% at its LCD glass joint venture with Korea's Samsung Electronics.

Sales in Corning's telecommunications unit fell 9% to $437 million from $477 million on weakened optical-fiber sales for private networks in North America.

Environmental technologies sales fell to $132 million from $209 million, hurt by weaker auto-pollution filter sales.

Corning uses a proprietary "fusion draw" process to create unvaryingly flat, chemically stable glass. Two sheets separated by a layer of liquid crystals are used to create the high-resolution monitors found in TVs, computers and digital phones as well as video cameras, Palm Pilots and medical-imaging devices.

Panel makers slowed their glass purchase orders at the end of 2008 to try and reduce a buildup in inventories as prices fell. In response, Corning took $165 million in first-quarter restructuring charges to pay for eliminating 3,500 jobs, or 13% of its payroll of 27,000.

Corning raised its estimate of worldwide glass sales in 2009 to 2.3 billion square feet, up 15% from 2 billion square feet in 2008.

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