Corning Earnings Beat Predictions, But Shares Dip on Flat Outlook
The world's leading maker of glass for liquid crystal displays earned $913 million, or 58 cents per share in the second quarter, up from a profit of $611 million, or 39 cents per share, a year earlier. Sales jumped to $1.7 billion from $1.4 billion. Gross margins jumped to 48.3% from 41.2%.
Analysts had predicted Corning's profits would be 52 cents on $1.65 billion in revenue, according to Thomson Reuters.
"We had an exceptional quarter with strong performance across our business segments," said Chairman and CEO Wendell Weeks. "We saw global LCD glass volume increases, robust sales performance across our entire telecommunications product portfolio, and Gorilla glass now being used or designed into more than 200 mobile devices."
Corning has enjoyed strong demand for its glass products this year, especially in flat-panel televisions and mobile devices. Its Display Technologies business volume increased more than 25% year over year. Samsung Corning Precision Materials volume was up more than 15% year over year. And Specialty Materials sales increased 77% year over year, the result of very strong Gorilla glass sales.
Gorilla is Corning's durable and scratch-resistant glass, used in smartphone and tablet computer screens. "There is vigorous customer pull for Gorilla glass and sales could reach $1 billion by 2011, especially as the product broadens its reach into the television market," CFO James Flaws said. Flaws added the company expects LCD glass demand to remain strong in the third quarter, and foresees stronger demand from China in the future.