Corning Inc.'s (GLW) first-quarter profit fell 38% as sharply lower prices for its liquid-crystal-display glass continued to weaken results, but the company said sales of that key product would return to growth this year.

Shares jumped 5.6% premarket to $14.10 as Corning, the world's largest maker of LCD glass for televisions, said LCD-glass price declines should be "much more moderate" in the current quarter and volume should build later this year on normal seasonality.

The company also predicted continued strong sales growth in its smaller telecommunications and specialty-materials segments, which make optical fiber and glass for handheld devices, respectively.

Corning's bottom line is heavily reliant on LCD glass. The display-technologies segment that houses that operation represents about a third of total sales but 89% of net income in the latest period. The segment has suffered as dim television demand spurred flat-panel makers with excess supply to negotiate steep price declines. That forced Corning to make significant LCD-glass capacity cuts it hoped would restore the balance, but it expected prices to remain depressed in the latest period.

Chairman and Chief Executive Wendell P. Weeks said Wednesday that LCD-glass volume was slightly better than the company forecast in the latest period. Display technology revenue declined 11% to $705 million on the price declines.

Overall, Corning posted a profit of $462 million, or 30 cents a share, down from $748 million, or 47 cents a share, a year earlier. Revenue edged down 0.2% to $1.92 billion.

Analysts surveyed by Thomson Reuters expected earnings of 28 cents a share on revenue of $1.87 billion.

Gross margin fell to 42.4% from 45.4%.

Sales in the telecommunications segment were up about 7.2%. In specialty materials, revenue rose 13% driven by its Gorilla Glass for smartphones and tablets.

The environmental-technologies segment increased revenue 1.5%, while the life-sciences segment's sales rose 7.6%. As part of its diversification effort, Corning earlier this month unveiled plans to pay about $730 million in cash to acquire the bulk of Becton Dickinson & Co.'s (BDX) lab-products business, snapping up a portfolio it said will significantly increase its presence in the life-sciences market. The company also sees increased demand in its telecommunications business.

--By Joan E. Solsman and Ben Fox Rubin, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com

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