Corning Inc.'s (GLW) fourth-quarter profit slumped 53% as the
company struggled, as expected, with sliding prices for
liquid-crystal-display glass.
Lackluster demand and excess production capacity has sent prices
for flat panel televisions tumbling in recent months, creating a
massive headwind for electronics retailers, set manufacturers and
companies like Corning, the world's largest supplier of LCD glass
for TVs.
Chief Financial Officer James B. Flaws said Wednesday the
company is working closely with customers to reduce glass prices to
help with their immediate financial strains, adding price declines
will be significant in the first quarter, though the company isn't
expecting much sequential change in the overall glass market in the
period.
Equity earnings in the first quarter are expected to decline 5%
to 20%, excluding special items, due to lower earnings at its
ventures with profits from the company's ventures with Samsung
Electronics Co. (SSNHY, 005930.SE) and Dow Chemical Co. (DOW).
The company last year slashed its profit forecast for the fourth
quarter, citing deeper-than-expected declines in LCD glass prices
and a unnamed South Korean customer that had backed out of part of
a sales contract.
Corning posted a profit of $491 million, or 31 cents a share,
compared with $1.04 billion, or 66 cents a share, a year earlier.
The year-earlier period included a $326 million credit. Excluding
items such as restructuring and other impairments, earnings fell to
33 cents a share from 46 cents.
Revenue increased 6.9% to $1.89 billion. Analysts surveyed by
Thomson Reuters expected earnings of 33 cents a share on revenue of
$1.85 billion.
Gross margin widened to 43.7% from 43.5%.
Display technology sales, the company's largest revenue driver,
jumped about 4% to $780 million.
Shares were off 2.5% at $14.25 premarket. Through the close, the
stock is up 6.6% in the past three months.
-By Mia Lamar and Lauren Pollock, Dow Jones Newswires;
212-416-2356; lauren.pollock@dowjones.com