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Corning forecasts price declines to stabilize

Tags: Corning

Specialty glass maker Corning Inc. (GLW-N) reported a lower first-quarter profit but forecast an uptick in LCD glass prices in the current quarter.

After two quarters of price declines for liquid crystal display glass, one of Corning's main products that is used in televisions, Corning said it expects price declines to moderate.

In previous quarters, Corning's main customers for its LCD business -- manufacturers such as LG Display Co Ltd and Sony Corp. -- have been struggling to eke out profits in their TV units as people put off buying new flat-screen sets in a tough economy.

Net income attributable to Corning fell 38 percent to $462 million US, or 30 cents per share, compared with $748 million, or 47 cents a share a year earlier. This beat analyst average estimates of 28 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell 0.2 percent to $1.92 billion in the first quarter, which beat Street estimates of $1.87 billion.

Lower retail demand globally for LCD televisions had led to a glut of the glass, which had given Corning's customers more muscle in demanding lower prices. But chief financial officer Jim Flaws said negotiations with its customers in the second quarter will help it achieve more stable prices.

"It reflects supply-demand situation coming more into balance. This has been a key goal for us to get back to more moderate and consistent price declines," Flaws said in an interview.

He added that pricing for the rest of the year is hard to predict because Corning negotiates its prices each quarter, but he is optimistic the company could see better profitability in upcoming quarters.

"Unless there is some lurking economic event, we would think demand does strengthen in the back half of the year," Flaws said.

But Alkesh Shah, an Evercore analyst, said weak "TV demand may hurt results in the second half of 2012." CTV Two CTV News CTV News Channel BNN - Business News Network CP24