By Franklin Paul
NEW YORK, July 28 (Reuters) - Specialty glass maker Corning Inc posted better-than-expected results on strong demand from makers of flat-screen televisions and electronic devices, but concerns about a possible demand slump weighed on its shares.
Consumers' desire for big TVs remains robust, particularly in China and elsewhere in Asia, even as the retail buying boom for LCD TVs in North America has calmed, the company said. TV demand helped boost net income by 49 percent at the largest maker of glass for liquid crystal display screens.
Corning's second-quarter net income was $913 million, or 58 cents a share, up from $611 million, or 39 cents a share a year ago. Analysts were looking for 52 cents per share, according to Thomson Reuters I/B/E/S.
For the second quarter, revenue rose 23 percent to $1.71 billion, beating expectations of $1.65 billion, according to the company.
Shares of Corning, whose competitors include Japan's Asahi Glass Co Ltd, fell in early trading, amid concerns that the LCD market's growth may soon crest.
Ticonderoga Securities analyst Brian White called Corning's volume growth expectation for LCD 'disappointing.'
'Corning expects LCD glass volume shipments to be flat sequentially and below our conservative estimate of up 4 percent,' he said.
'This is well below typical seasonality and speaks to the challenges starting to emerge in the LCD supply chain that we believe will worsen over ... three to six months given excess inventories, production cuts at the LCD panel makers and an increasingly challenged consumer around the world.'
In an interview, Chief Financial Officer James Flaws refuted concerns that demand for LCD TVs may soon stall, leaving the company's customers with a glut of glass.
'Investors worry short-term about whether the supply chain will grow too much inventory, and about how long the growth story remains for LCD,' he said. 'We believe it will remain longer than investors do, driven by a replacement wave that we think will start.'
On a conference call with investors, he added: 'We do not expect to see an overbuild of inventory in the supply chain heading into the fourth quarter.'
Corning said sales in its unit that sells glass to the telecommunications industry rose 4 percent from a year ago, and 21 percent from the first quarter, driven by growth of private networks and new fiber-to-the-home projects in Canada.
The company said it expects its third-quarter telecommunications segment sales to be flat to down slightly, while its environmental technologies and Life Sciences segment sales are expected to be consistent with the second quarter.
Corning's shares fell 2.3 percent, or 42 cents, to $17.58 in early trading on the New York Stock Exchange. The stock is down about 7 percent this year, on par with the decline in the S&P 500 index.
(Reporting by Franklin Paul, editing by Maureen Bavdek) Keywords: CORNING/ (Email: Franklin.Paul@thomsonreuters.com; +1 646 223 6195; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, July 28 (Reuters) - Specialty glass maker Corning Inc posted better-than-expected results on strong demand from makers of flat-screen televisions and electronic devices, but concerns about a possible demand slump weighed on its shares.
Consumers' desire for big TVs remains robust, particularly in China and elsewhere in Asia, even as the retail buying boom for LCD TVs in North America has calmed, the company said. TV demand helped boost net income by 49 percent at the largest maker of glass for liquid crystal display screens.
Corning's second-quarter net income was $913 million, or 58 cents a share, up from $611 million, or 39 cents a share a year ago. Analysts were looking for 52 cents per share, according to Thomson Reuters I/B/E/S.
For the second quarter, revenue rose 23 percent to $1.71 billion, beating expectations of $1.65 billion, according to the company.
Shares of Corning, whose competitors include Japan's Asahi Glass Co Ltd, fell in early trading, amid concerns that the LCD market's growth may soon crest.
Ticonderoga Securities analyst Brian White called Corning's volume growth expectation for LCD 'disappointing.'
'Corning expects LCD glass volume shipments to be flat sequentially and below our conservative estimate of up 4 percent,' he said.
'This is well below typical seasonality and speaks to the challenges starting to emerge in the LCD supply chain that we believe will worsen over ... three to six months given excess inventories, production cuts at the LCD panel makers and an increasingly challenged consumer around the world.'
In an interview, Chief Financial Officer James Flaws refuted concerns that demand for LCD TVs may soon stall, leaving the company's customers with a glut of glass.
'Investors worry short-term about whether the supply chain will grow too much inventory, and about how long the growth story remains for LCD,' he said. 'We believe it will remain longer than investors do, driven by a replacement wave that we think will start.'
On a conference call with investors, he added: 'We do not expect to see an overbuild of inventory in the supply chain heading into the fourth quarter.'
Corning said sales in its unit that sells glass to the telecommunications industry rose 4 percent from a year ago, and 21 percent from the first quarter, driven by growth of private networks and new fiber-to-the-home projects in Canada.
The company said it expects its third-quarter telecommunications segment sales to be flat to down slightly, while its environmental technologies and Life Sciences segment sales are expected to be consistent with the second quarter.
Corning's shares fell 2.3 percent, or 42 cents, to $17.58 in early trading on the New York Stock Exchange. The stock is down about 7 percent this year, on par with the decline in the S&P 500 index.
(Reporting by Franklin Paul, editing by Maureen Bavdek) Keywords: CORNING/ (Email: Franklin.Paul@thomsonreuters.com; +1 646 223 6195; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2010 AFX News
