Corning 1Q profit jumps to $816 million on high demand for LCD-TV glass; beats forecast

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Corning earns soar in 1Q on TV glass demand

ROCHESTER, N.Y. — Corning Inc. said Wednesday its profit soared to $816 million in the first quarter on surging sales of LCD glass for flat-panel televisions and computers and highly durable cover glass for cell phones and handheld video devices.

The world’s largest maker of liquid-crystal-display glass said it expects robust demand for LCD-TVs, laptops and desktop computers, along with an improved retail outlook for those consumer electronics products, will bump up LCD glass industry volume in 2010.

The glass pioneer, which commands nearly two-thirds of the LCD glass market, now expects volume to reach 2.9 billion to 3.1 billion square feet in 2010, up as much as 27 percent from 2.45 billion square feet in 2009. It previously forecast a range of 2.8 billion to 3 billion square feet this year.

Sales in Corning’s display technologies segment more than doubled to $782 million in the January-March period from $357 million in last year’s first quarter. “We were essentially sold out,” said Chief Executive Wendell Weeks.

DisplaySearch, a market-research firm in Austin, Texas, estimates 181 million LCD-TVs will be shipped worldwide in 2010, up 24 percent from 2009. In North America, shipments are expected to rise 11 percent to 41.5 million.

In the United States, “we continue to see a very rapid growth in flat-panel TVs even at a relatively late stage in the adoption cycle,” said DisplaySearch analyst Paul Gagnon. “The year-over-year growth rate actually increased compared to 2008, which you wouldn’t expect for the global economic situation. That has led to us increasing our outlook for 2010 and beyond.”

Corning said it earned the equivalent of 52 cents per share in the quarter, up sharply from $14 million, or 1 cent per share, a year earlier when recession jitters brought a plunge in glass orders and a $165 million pretax charge to pay for 3,500 layoffs. Analysts expected lower earnings of 42 cents per share.

Sales jumped 57 percent to $1.55 billion from $989 million a year ago — narrowly beating analysts’ forecasts of $1.52 billion.

Corning shares slipped 5 cents to close at $20.07 Wednesday. They are trading near their 52-week high of $21.10.

LCD glass is Corning’s biggest business by far. Based in western New York, the 159-year-old company also makes ceramic auto-pollution filters and is the world’s largest producer of optical fiber and cable. It employs 24,500 people.

Sales in Corning’s telecommunications unit fell 5 percent to $364 million, hit by lower optical fiber sales in China. Environmental technologies sales jumped 75 percent to $192 million, driven by higher-than-expected demand for auto-pollution filters, especially in China and North America.

Life-sciences sales rose 55 percent to $118 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.

Propelled by Gorilla glass, a chemically strengthened, nearly scratch-resistant cover glass now used in 80 consumer devices from phones and laptops to touch-screen displays, specialty materials sales rose 60 percent to $96 million.

Launched in 2008, Gorilla glass generated $80 million in revenue last year and could be a $300 million business within the next few years, the company said.

“Gorilla continues to find its way into more products and hopefully a few more soon with much larger screen sizes,” Corning’s chief financial officer, Jim Flaws, said in a conference call with analysts. “Investors often ask us what the most significant next business opportunity is for Corning. We think it’s Gorilla.”

On the Net: www.corning.com