Corning Announces Second-Quarter Results

Corning:

Display Technologies’ wholly owned business volume decreased slightly sequentially and about 5% compared to a year ago. Samsung Corning Precision Materials Co., Ltd.’s volume was up about 10% on a quarterly basis and up slightly year over year. The total glass volume, of Corning’s wholly owned business and SCP combined, increased 5% sequentially.

SCP supplies Samsung and it seems Samsung’s success significantly determines the success of Corning’s Display Technologies business.

Sales in the Display Technologies segment were $760 million, a decline of 4% sequentially and 9% year over year. The sequential sales result was due in part to the anticipated temporary curtailment of LCD TV production by Sharp Electronics Corporation. Sharp resumed production in the latter part of the quarter. Glass price declines were moderate.

Volume increased 5% Q/Q but sales decreased 4% Q/Q. That would mean ASPs took a beating.

Corning Vice Chairman and CFO, James Flaws:

The display industry has been behaving more cautiously in recent weeks, driven primarily by weaker retail expectations for the second half. We have seen many LCD TV brands reduce their sales forecasts for the year. As LCD panel manufacturers have taken a more measured approach to their supply chain demands, they may be waiting a little longer to raise panel fab utilization for seasonal fourth-quarter retail demand.

Based on the lower TV sales expectations and more conservative supply chain behavior, we now expect the worldwide glass market to be between 3.3 billion and 3.4 billion square feet this year, versus previous expectations of 3.5 billion to 3.7 billion square feet.

The worldwide glass market in 2010 was 3.15 billion square feet. Corning expects zero sequential growth in third quarter glass volume:

Glass volume for the company’s wholly owned business is expected to grow in the mid- to upper-single digits sequentially. At Samsung Corning Precision, volume is anticipated to decrease in the mid-single digits for the quarter. Glass price declines are expected to be moderate.

This could signify Samsung, SPC’s main customer, to be headed for a weak third quarter.

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