Corning Turns Up the Volume

Date: 22 September 2005
Source: Thestreet.com

Date: 22 September 2005

Corning is bullish on third-quarter fiber-optic sales but says some new charges also loom. The technology glassmaker reaffirmed earlier guidance that it would make about 21 cents a share on sales of $1.16 billion for the quarter ending Sept. 30.

But the company says it now sees stronger-than-expected demand for optical cable.

Because of a surge of orders in the U.S., presumably for fiber-optic expansion work by phone companies such as Verizon (VZ:NYSE - commentary - research - Cramer's Take), Corning says fiber cable sales volume will be 15% to 20% higher than in the prior quarter. Corning had previously expected a flat to 5% decline in telecom fiber volume in the third quarter.

And in the company's much-watched display glass segment, Corning now expects sequential volume growth to be 15% to 20% above second-quarter levels. Originally, Corning was expecting flat panel computer monitor and LCD TV glass volume growth to be somewhere in a range between 10% and 20%.

With consumers choosing more flat panel TVs and computer screens over conventional cathode ray tube, or CRT, displays, the drop in CRT sales will hurt the Samsung Corning joint venture.

"We expect that Samsung Corning will incur impairment and restructuring charges that will reduce Corning's equity earnings by at least $100 million to $150 million in the third and fourth quarters," CFO Jim Flaws said in a press release Wednesday.

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