UPDATE 3-Corning says LCD glass market better than expected

* Sees 2010 glass demand 2.7-2.8 bln sq ft vs 2.4 bln '09

* Sees Q4 glass volume flat to up slightly

* Shares up 0.9 pct (Updates dateline, adds details on black Friday and 2010 cost reductions; updates shares)

NEW YORK/SAN FRANCISCO, Dec 9 (Reuters) - Corning Inc (GLW.N) raised its forecast for fourth-quarter glass volume on strong demand for LCD televisions and said the worldwide glass market could be larger in 2010 than it previously thought.

The specialty glass company, the largest maker of glass for liquid crystal displays, said it expects glass supply to remain very tight for the rest of the quarter.

"Fourth-quarter demand is strong enough that if we could produce more glass, we would be able to sell it," Corning Chief Financial Officer James Flaws said in a statement ahead of a Barclays investor conference on Wednesday.

Corning forecast 2010 global LCD glass demand would total 2.7 billion to 2.8 billion square feet, compared with an estimated 2.4 billion square feet this year.

It said global LCD TV sales will top 132 million sets in 2009, up from its previous estimate of 129 million.

"The strength of the fourth quarter suggests that the 2010 LCD glass market could be larger than what we previously thought. If the supply chain exits this year at healthy levels and retail sales continue strong, the normal seasonal decline the glass industry usually experiences in the first quarter may be less than anticipated," Flaws said.

During his talk at the Barclays conference, Flaws said LCD TV retail sales for the week of Black Friday grew 19 percent over last year, according to industry tracker NPD. He added that Corning typically sees four to five times as many televisions sold during the post-Thanksgiving shopping week as the week before.

"We're not disappointed in the United States -- remembering that we're still in a recession -- to have 20 percent growth," Flaws said.

Sales of 40-inch and larger TVs grew 26 percent, he added, shrugging off fears that the recessionary environment would impact higher-end sales.

Corning forecast fourth-quarter glass volume would be flat to up slightly, compared with its previous forecast for flat to down slightly.

Global LCD TV sales rose 45 percent year over year in October, with strength seen in all major TV markets, Corning said, adding that LCD TV unit sales rose 28 percent in the United States and remained strong throughout November.

LCD TV sales rose 20 percent in Europe, 115 percent in China and 73 percent in Japan, the company added, citing internal analysis and consumer research reports.

LCD TV sales will grow in developing countries as income rises along with an appetite for upgraded TVs, Flaws said. Some 19 percent of the world's 2.1 billion TVs are LCD, and upgrades from cathode-ray-tube technology eventually will drive demand for LCD glass to double that sold over the past 20 years, he added.

About 400 million LCD TVs have been sold to date, he said, and half of those were sold over the past two years.

While laptops and computer monitors represent roughly 35 percent of overall LCD glass sales, Flaws said that market segment still represents a significant area of growth.

Looking toward 2010, he said increased factory utilization heading into the new year could allow Corning to expand gross margins through further cost cuts.

In contrast to the TV market, Corning said glass for telecommunications clients is on track to fall 10 percent to 15 percent sequentially, with weakness seen in most markets except China. The company expects telecoms spending to be lower next year, saying the industry is usually one of the last to recover from economic downturns.

Shares of Corning fell 0.9 percent to $18.05 amid a broad market decline. (Reporting by Tiffany Wu and Ian Sherr editing by Gerald E. McCormick)