Corning makes upbeat glass forecast, shares rise
NEW YORK (Reuters) - Corning Inc (GLW.N) is looking to boost sales of its glass more than 50 percent by 2014, banking on the popularity of tablets and smartphones, which helped boost its shares 3.5 percent on Friday.
Corning said its display segment, which makes up the bulk of the company's profit and includes glass for touchscreen devices and liquid crystal display televisions, would increase to between $3.4 billion and $3.8 billion by 2014 from $3 billion in 2010. This would create demand for an extra 2 billion square feet of LCD glass in the next three years.
The forecasts were made during an investor presentation in New York.
Corning also estimated tablet computer sales could rise to almost 180 million by 2014 from roughly 20 million, which is in line with projections by research firm DisplaySearch.
Tablet sales would increase Corning's sales of Gorilla Glass, the scratch-resistant thin glass that covers touchscreen devices such as Motorola Mobility Holdings Inc's (MMI.N) Droid phones and Samsung Co Ltd's (005930.KS) Galaxy Tab.
Chief Financial Officer Jim Flaws told investors the specialty materials division, which includes Gorilla Glass, could increase sales to between $1.8 billion and $2 billion in 2014 from $600 million in 2010.
Investors were pleased with the forecasts and how Corning was showing it can ride fast-growing trends such as smartphones profitably.
"With smartphones, there is a lot more emphasis on the display and that opens up a big opportunity for Gorilla Glass," said Kevin Landis, Chief Investment Officer of Firsthand Technology Funds.
Landis said one of his funds' biggest positions was Corning.
But many investors still consider Corning a company largely dependent on the ebb and flow of the LCD market.
Demand for LCD panels has slowed across the industry as U.S. consumers show little appetite for upgrading televisions after buying their first flat-screens sets.
The weaker market has led to price cuts among LCD glass makers. Earlier this week, Japan's Sony Corp's (6758.T) lowered its revenue forecast on slower-than-expected TV sales.
Sony, which makes Bravia TVs, cut its forecast for TV sales in the full year to March 31 to 23 million units, down from its previous forecast of 25 million.
Yet Corning, which competes with LG Display Co Ltd (034220.KS) and Asahi Glass Co Ltd (5201.T) insisted in its presentations on Friday that reports LCD glass demand is maturing were exaggerated. The company said the LCD TV replacement rate should be twice that of traditional sets.
Corning also pointed to growing markets for big screen sets in Asia, which struck a chord with investors.
"Corning is very well positioned on the worldwide trend of the rise in the global consumer class," Landis said, adding that, even if people in the U.S. are not buying new TVs, people in India and other countries will start spending on them.
Corning posted strong quarterly results last month, suggesting it was bucking weaker trends in the LCD market.
Corning said 2014 revenue should increase to $10 billion, up from $6.6 billion in 2010. Analysts were expecting revenue of $7.72 billion in 2011 and $8.3 billion in 2012, according to Thomson Reuters I/B/E/S.
The company's shares closed up 80 cents at $23.37 on the New York Stock Exchange on Friday.
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