Reuters logo
UPDATE 3-Corning profit beats on strong demand for Gorilla Glass
April 24, 2013 / 11:46 AM / 5 years ago

UPDATE 3-Corning profit beats on strong demand for Gorilla Glass

* 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 2nd qtr

* Shares rise 5 percent in morning trading

By Chandni Doulatramani

April 24 (Reuters) - 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 materials division.

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 back shares.

Corning shares were up 4.8 percent at $13.76 at midday on the New York Stock Exchange.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below