Corning Announces Improved 2Q LCD Volume Performance
30 Junho 2009 - 9:00AM
Business Wire
Corning Incorporated (NYSE:GLW) Vice Chairman and Chief
Financial Officer James B. Flaws today updated the company�s
guidance of sequential second-quarter LCD glass volume growth,
citing significant improvement in demand for LCD glass.
�Second-quarter glass demand is much stronger than we
anticipated even a few weeks ago,� Flaws reported. �As a result, we
now expect second-quarter sequential volume to be up approximately
100% at our wholly owned business.� He pointed out that the company
has met much of the improved demand by drawing down its existing
inventory. Additionally, the company has begun shipping glass from
melting tanks that were restarted earlier in the quarter. Corning
originally forecasted a second-quarter volume increase of more than
50%, and at the end of May revised volume growth expectations to
more than 75%.
Samsung Corning Precision Glass Co., Ltd. (SCP) second-quarter
sequential glass volume is expected to be up about 50%, an increase
from both the more than 40% figure announced May 28 and the
original expectation of more than 25% growth. Flaws pointed out
that SCP�s volume did not decline as steeply as Corning�s wholly
owned business did in the first quarter.
Regarding LCD glass pricing, Flaws said that second-quarter
prices were moderate and substantially below the first-quarter
price declines.
�As we exit this quarter,� Flaws added, �our model indicates
that the industry�s second-quarter supply chain inventory is
equivalent to inventory levels at the beginning of this year. We
see this as a positive sign. Industry growth required a
supply-chain expansion after the significant contractions we saw in
the first quarter. As we go forward, we expect some further
supply-chain expansion as the industry prepares for the seasonally
stronger fourth quarter.�
Strong Retail TV Demand
Flaws said that continued retail demand for LCD televisions is
helping to prevent excessive buildup of inventory in the supply
chain. He noted that various industry reports on retail data showed
in April LCD TV unit sales increased 22% in Europe, and 77% in
China. In May, LCD TV sales were up 48% in Japan.
�While retail LCD TV sales growth in the United States had
slowed somewhat in April after a very strong first quarter, reports
that we have received indicate a significant upward spike in
domestic LCD TV sales in late May and the first three weeks of
June,� Flaws noted.
The company has not changed its expectation that the global LCD
glass market will be between 2.1 billion and 2.2 billion square
feet this year, �But given the continued strong demand for LCD TVs
in recent months, especially in China, we believe there could be an
upside to this forecast,� Flaws said. �We will continue to monitor
retail trends and provide any updates in our second-quarter
conference call.�
Looking forward, Flaws said that Corning expects that its
third-quarter LCD glass shipments will be consistent with the
improved second-quarter forecast. �We significantly reduced our
inventories in the second quarter to meet the increased needs of
our customers. We also are strategically restarting capacity in
response to some of the improved market demand. However, we expect
to be capacity constrained in the third quarter as demand will
remain higher than our ability to manufacture.� As a result, Flaws
pointed out, Corning is prioritizing its glass allocation to its
long-term supply agreement customers.
�It is important to point out that our initial forecast of
third-quarter glass shipments called for moderate sequential
growth. This assumption was made off a much lower second-quarter
growth rate than what has occurred. We now believe that
third-quarter shipments will be on par with our significantly
improved second-quarter results,� he added.
Third-quarter LCD glass volume at SCP is also expected to be
consistent with the stronger-than-expected second-quarter
results.
The company anticipates third-quarter glass pricing at its
wholly owned business and SCP to be approximately flat versus the
second quarter.
�It is far too soon to forecast fourth-quarter performance,�
Flaws said, �but if retail demand for LCD TVs continues to be
stronger than forecasted, we could see a more muted seasonal
decline for LCD glass demand.�
Corning also announced that it will release its second-quarter
financial results before the financial market openings on Monday,
July 27, 2009. The company will host a second-quarter conference
call and webcast at 8:30 a.m. Details will be posted on the company
website at the investor relations page,
www.corning.com/investor_relations.
Forward-Looking and Cautionary Statements
This press release contains �forward-looking statements� (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning�s financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions;�conditions in the�financial and credit
markets;�currency fluctuations;�tax rates; product demand and
industry capacity; competition; reliance on a concentrated customer
base; manufacturing efficiencies; cost reductions; availability of
critical components and materials; new product commercialization;
pricing fluctuations�and�changes in the mix of sales between
premium and non-premium products; new plant start-up�or
restructuring�costs; possible disruption in commercial activities
due to terrorist activity, armed conflict, political instability or
major health concerns; adequacy of insurance; equity company
activities; acquisition and divestiture activities; the level of
excess or obsolete inventory; the rate of technology change; the
ability to enforce patents; product and components performance
issues; stock price fluctuations; and adverse litigation or
regulatory developments.�These and other�risk factors
are�detailed�in Corning�s filings with the Securities and Exchange
Commission. Forward-looking statements speak only as of the day
that they are made, and Corning undertakes no obligation to update
them in light of new information or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 150 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy and metrology.
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