UPDATE 2-Gorilla Glass helps Corning beat Street estimates
* Fourth-quarter adjusted earnings $34/shr vs est $32/shr
* Revenue rises 14 pct to $2.15 bln vs est $2.07 bln
* Shares rise marginally in morning trading
By Chandni Doulatramani
Jan 29 (Reuters) - Specialty glass maker Corning Inc's quarterly profit beat Wall Street estimates as strong sales of its scratch-resistant Gorilla Glass used in smartphones and tablets more than made up for weakness in its LCD glass business.
Corning's LCD glass business has been hit by declining prices as customers such as Samsung Electronics Co struggle to make profits on TVs and consumers show little appetite for upgrading their flat-screen sets.
The LCD glass business had sales of $800 million in the fourth quarter, up about 3 percent from a year earlier and accounting for about 37 percent of revenue.
Sales in the specialty materials business, which makes Gorilla Glass, rose 68 percent in the quarter to $399 million, or about 19 percent of total revenue. Sales from Gorilla Glass exceeded $1 billion for the year, Corning said.
Samsung's Galaxy Note products, Nokia's Lumia phones and Droid Razr smartphones made by Google Inc's Motorola business use Gorilla Glass.
However Corning, which also makes materials used in the telecommunications, medical and aerospace industries, said on Tuesday it expects sales from its specialty materials division to drop by about 30 percent in the current quarter compared with the fourth quarter, which includes the holiday shopping period.
Prices in the LCD glass business will continue to decline in coming quarters, but at a slower rate, the company said.
Corning is also betting on an increase in demand for LCD TVs and as customers opt for larger screens.
"For 2013, we expect there to be a growth in the number of TVs sold, and we think that unit growth will be probably up in the mid-single digit. But what we think, equally, or maybe even more important is the movement to even larger TVs," Senior Vice President Tony Tripeny told Reuters.
The company expects strong demand for LCD TVs in China in the first quarter due to the Chinese New Year, he said.
All of Corning's display customers are in the Asia Pacific region. International markets accounted for about 78 percent of its net sales of $7.89 billion in 2011.
Excluding one-time items, Corning earned 34 cents per share in the fourth quarter. Revenue rose 14 percent to $2.15 billion.
Analysts were expecting adjusted earnings of 32 cents per share on revenue of $2.07 billion, according to Thomson Reuters I/B/E/S.
Net income fell to $283 million, or 19 cents per share, from $491 million, or 31 cents per share, a year earlier.
Shares of the company, which had risen about 10 percent in the six months to Monday, were up 0.6 percent at $12.23 in morning trading on Tuesday.
- Tweet this
- Share this
- Digg this