* First-quarter adj EPS $0.30 vs est $0.24
* Revenue flat at $1.81 bln vs est $1.96 bln
* Expects sales of specialty materials to rise 15-20 pct in
* Shares rise 5 percent in morning trading
By Chandni Doulatramani
April 24 Specialty glass maker Corning Inc's
first-quarter profit beat analysts' estimates, helped by
demand for its Gorilla Glass used in smartphones and tablets, as
the company looks to touch-screen PC notebooks for its next
phase of growth.
Corning shares rose as much as 5 percent in morning trading
on the New York Stock Exchange, adding to the 7 percent increase
in the three months to Tuesday's close.
The company said on Wednesday it expected sales in its
specialty materials business to increase by 15 to 20 percent in
the current quarter, compared with the first quarter, as demand
for scratch-resistant Gorilla Glass increases.
Apple Inc's iPhones and iPads, Samsung Electronics
Co's Galaxy Note products and Nokia's
Lumia phones are among products that use Gorilla Glass.
"If the market were to move to 'touch' in notebook ... that
actually would double the size of the market that would be
available for Gorilla Glass," Senior Vice President Tony Tripeny
told Reuters. The automobile and building industries also
offered plenty of opportunities, he said.
Chief Financial Officer Jim Flaws said Corning had taken
decisive action to hedge against the recent sharp depreciation
of the yen against the dollar, capping the company's exposure at
93 yen to the dollar.
The yen, which has been falling since the Bank of Japan
unleashed an intense burst of monetary stimulus earlier this
month, was trading around 99.5 to the dollar on Wednesday.
"The change in yen/dollar exchange rate actually helps most
of our customers as they sell their LCD panels in dollars and
buy our glass in yen," Flaws said on a call with analysts.
Corning's competitors include Japan's Asahi Glass Co Ltd
and Sumitomo Electric Industries Ltd, which
stand to benefit from a weaker yen.
Corning's net income rose to $494 million, or 33 cents per
share, in the first quarter, from $474 million, or 31 cents per
share, a year earlier.
Excluding items, the company earned 30 cents per share.
Revenue was little changed at $1.81 billion. Analysts on average
had expected earnings of 24 cents per share on revenue of $1.96
billion, according to Thomson Reuters I/B/E/S.
The company's gross margin increased to 43 percent, up from
42 percent a year earlier and exceeding the company's own
forecast of 41 percent.
Sales of Gorilla Glass have more than made up for weakness
in Corning's LCD glass business, as people who already own a
flat-screen TV show little appetite to upgrade to new models.
But revenue in the display technologies business, which
makes LCD panels, increased 7 percent to $650 million in the
first quarter and the company said LCD price declines were more
moderate than in the fourth quarter.
While the company credited strong demand for Gorilla Glass
for earnings growth in the quarter, it does not break out
Gorilla Glass sales from overall sales in its specialty
Sales in that division declined 10 percent, to $258 million,
largely because of weakness in the semiconductor market, which
uses Corning's optical products.
Sales in the company's telecom business slowed because of
the withdrawal of some government incentives in the United
States and a weak European economy, Corning said.
Revenue also declined in Corning's environmental
technologies business, which supplies filters and other products
to the automotive industry, mainly due to weak economic
conditions in Europe.
Sales in the telecommunications business fell 7 percent to
$470 million, while those at the environmental technologies
business fell 13 percent to $228 million.
Corning raised its quarterly dividend to 10 cents per share
from 9 cents, and said it would spend up to $2 billion to buy
Corning shares were up 4.8 percent at $13.76 at midday on
the New York Stock Exchange.