NEW YORK (Reuters) - Specialty glass maker Corning Inc (GLW.N) posted a better-than-expected quarterly profit on Wednesday, driven by strong demand for glass for flat screen televisions and computer monitors.
Shares of Corning rose 1 percent in premarket trading after the biggest maker of glass for liquid crystal displays increased its most optimistic forecast for annual glass industry output. Strong Chinese demand for flat-screen TVs is brightening up the outlook for the global LCD sector.
Corning, whose rivals include LG Display Co Ltd (034220.KS) and Asahi Glass Co Ltd (5201.T), said its first-quarter net income rose to $816 million, or 52 cents a share, from $14 million, or 1 cent a share, a year earlier.
Analysts had expected 42 cents a share, according to Thomson Reuters I/B/E/S.
“Upside came from strong gross and operating margins given solid profitability in Display and Telecom, as well as better than expected equity earnings from (equity ventures) Dow Corning and Samsung Corning Precision,” said UBS analyst Nikos Theodosopoulos in a client note.
Revenue rose 57 percent to $1.55 billion, slightly better than the analysts’ view of $1.52 billion.
The significant financial improvements reflect the weakness of the company’s first quarter one year ago when television makers were buying less glass after they had snatched up supply in 2008 hoping for robust consumer demand.
Consumer demand for televisions remains strong, the company said, led by gains in Asia. Corning said first quarter sales rose to $782 million in its Display Technologies segment, more than doubled from a year ago and up 9 percent from fourth quarter sales.
Corning Chief Financial Officer Jim Flaws told Reuters that the company sees 2010 LCD TV unit sales to be about 177 million for the year, versus its original estimate of 171 million, and 2009 shipments of 145 million.
The company lifted its outlook for annual LCD glass market output to a range of 2.9 billion square feet to 3.1 billion square feet, which represents a year-over-year growth rate of 18 percent to 27 percent. It had previously expected output of 2.8 billion to 3.0 billion square feet.
Corning said sales in its unit that sells glass to the telecommunications industry fell 5 percent from a year ago, but it expects sales to improved by 10-15 percent in the second quarter, compared to the first.
Reporting by Franklin Paul; Editing by Lisa Von Ahn and Derek Caney