Earnings Preview: Corning Inc.

Mon, 01/25/2010 - 4:01am
BEN DOBBIN - AP Business Writer - Associated Press

Specialty glass and ceramics maker Corning Inc. reports its results for the fourth quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Corning is the world's biggest maker of liquid-crystal-display glass for flat-screen televisions and computers. After an alarming slowdown in late 2008, LCD glass demand veered higher in February 2009 and has gradually picked up pace, lifting Corning's stock to a 52-week high on Jan. 11.

In December, Corning said its fourth-quarter glass volume should be flat to up slightly, compared with its previous forecast of flat to down slightly. The 159-year-old glass pioneer, which corners nearly two-thirds of the LCD glass market, now expects the global industry's volume to grow 16.7 percent to 2.8 billion square feet this year from an estimated 2.4 billion square feet in 2009.

Market researcher iSuppli Corp., based in El Segundo, Calif., said significant price cuts helped drive LCD-TV sales during the December holiday season. DisplaySearch, based in Austin, Texas, expects global LCD-TV revenue to rise in the January-March period versus a year ago for the first time in six quarters.

LCD-TV shipments are projected to rise 21 percent to 171 million units in 2010 from 141 million last year, says DisplaySearch analyst Paul Gagnon.

Because LCD glass is its biggest business by far, last winter's market dip prompted Corning to cut 3,500 jobs. Based in the city of Corning in western New York, Corning also makes ceramic auto-pollution filters and is the world's largest producer of optical fiber and cable. It employs 24,500 people.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters, whose estimates typically exclude one-time items, expect fourth-quarter profit of 42 cents a share on revenue of $1.45 billion. That would be up sharply from a comparable 13 cents a share on sales of $1.08 billion in the fourth quarter of 2008. Its net profit a year ago plunged 65 percent to $249 million, or 16 cents a share.

ANALYST TAKE: Jefferies & Co. analyst George Notter, who has a "Buy" rating on Corning, lifted his price target for Corning's shares to $23 from $22.50 in a note to clients on Jan. 11. Notter thinks Wall Street is underestimating the long-term market size and trajectory for LCD-TV unit sales, citing strong December retail sales at Best Buy Co., Target Corp., BJ's Wholesale Club Inc. and Costco Wholesale Corp.

Citigroup analyst Jim Suva boosted his 2009 profit estimate to $1.36 from $1.34 and his 2010 estimate to $1.84 from $1.57. Analysts surveyed by Thomson Reuters expect $1.68 on average this year.

STOCK PERFORMANCE: Corning shares jumped 26 percent in the quarter. They are trading near the high end of a 52-week range of $9.12 to $20.84.


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