Gorilla Glass Maker's Stock Falls Due to Tablet Sales

Corning's stock price takes a hit mainly due to weaker than expected demand for tablet devices.
4:44 | 07/29/14

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Transcript for Gorilla Glass Maker's Stock Falls Due to Tablet Sales
That that -- new York and as a financial markets are closing on Wall Street what is Tuesday July -- -- story stock -- one stock with a -- a Corning. The maker of course of all those baking -- is also the maker of Gorilla Glass screens and -- Samsung phones but those screen sales are falling. And with it. Stock shares for -- -- to explain why likes -- put out by joining us on this Tuesday some might you grow blessings to be obviously these products very popular but -- the sales slumping. While they are actually so. Lumping managing we're still growing in the last quarter but they came in lower than expected in Corning has. Some fairly temperate words about the coming demand for -- the next couple couple of quarters that's what Walter reacted negatively to. So it's still a growing category but especially when it comes to. The glass used in tablets and some other Smartphones and tablets in particular seem to be the culprit here just aren't selling as most people thought we knew we had a -- problem. Basically in terms of a lot of enthusiasm that all these tablet makers. Had going in and now producing a lot of these things may have not necessarily sold it seems like there a little bit of a product in between what people want between a laptop. And a large Smartphones and that seems to be what's really weighing on now the sentiment around Corning today. So the event let me ask you this about this whole cheap hardware -- the high end market is -- over saturated. It's potentially over -- -- mean look Corning has had to fight this battle over the years they keep it kind of coming up with these great new. Glass and ceramic related products. And then you know they become -- monetize -- keep having to make them better and better they have really matters to preserve -- franchise there. But when he gets you know 11 of these product cycle -- develops and all of a sudden they're left with too much of a relatively. Low pricing power product that happening TVs as well two years ago they make the LCD screens for TV's. This is where they're -- so it's not as if game over for recording it just means -- have to run a little bit harder and wait for that next product cycle to kick in whatever that new fancy. Kind of high performance classes they're -- they're going to be putting it to the next. Generation of devices. Let's go to the -- -- stock charge to see exactly how Corning did there. Put this into perspective that if you can -- as far as how -- missed analysts' expectations. It's actually a pretty big men and big drop more -- just by 10% for -- one penny miss -- mean basically the operating earnings came in just 37 cents thirty cents was the forecast. The context for this though is that the stock has run out nicely this year as a seventeen dollar stock to start the year was up nearly 30% heading into this report. And just because they didn't really happen. A lot of optimism about the demand. For that quarter growth product which is specialty materials will -- including Gorilla Glass. It show you that basically analyst analysts and investors were using Corning stock. Really just as a proxy for growing demand of that class display product and not necessarily wanted to own the company for all the rest that it has long term. Well given that then -- will eventually be in me is the likelihood of the stocks -- -- settle after that analysts have sort of tease out that potential stimulus. Yeah I mean odds are yes that it will kind of find its new level when it's not really all about just what. There's going to be -- next quarter demand for Gorilla Glass do you think there's a pretty good story here for Corning very long terms -- 160 year old company. They basically -- very science based in addition to. The glass display products there are huge and making fiber optic. Products they invented fiber optics basically at the company so there's a lot else that they do. The problem is those types of products are pretty much steady they don't necessarily go through. Quite the boom bust cycle that people are now geared up for when it comes to the Smartphone and tablet display business of course a lot of talk out there to by the way. That. That apple in its next generation of iPhone is gonna use a sapphire glass and even different. Newark kind of class that's beyond -- -- produces right now so it's hard to say. Exactly you know how investors are -- to view this in the next couple of quarters but ultimately as accompanied his plane of value here. Well listen as long as we're still making tuna noodle casserole -- -- -- -- as a way I guess I should emphasize the company no longer makes Corning ware -- I'm so glad you pointed that out I was heading up to that joke I set it up Soria. They invented it. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

This transcript has been automatically generated and may not be 100% accurate.

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