Earnings Preview: Corning to post solid 1Q results
NEW YORK—Corning Inc. reports first-quarter earnings on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Corning is the world's largest maker of liquid crystal display glass, and in the fourth quarter posted better-than-expected results, fueled by strong demand for glass used in flat-screen televisions and computers.
The company's chief financial officer, Jim Flaws, said in January Corning is "not forecasting a slowdown and we have not seen any signs of a slowdown" in the LCD business despite U.S. economic jitters. For the latest quarter, analysts expect similarly strong results as demand continues to be solid, helped by growth in emerging markets.
Corning said in January it expects LCD glass volume to jump 45 percent in the first quarter compared with the year-ago period.
BY THE NUMBERS: Analysts, on average, are predicting a profit of 42 cents per share on sales of $1.59 billion, according to a poll by Thomson Financial.
The company has forecast profit of 41 cents to 43 cents per share, excluding items, on sales between $1.59 billion and $1.62 billion.
ANALYST TAKE: "Its widely expected that Corning will report strong results tomorrow," wrote RBC analyst Mark Sue in a note to investors. He said demand for display screens is strong, pricing is "rational" and low inventories could lead to sales exceeding his $1.61 billion estimate. He rates the stock "Outperform."
Thomas Weisel Partners analyst Ajit Pai also expects strong results, but he recently downgraded Corning saying investors may be concerned about the effects of the slowing economy during the second half of this year.
WHAT'S AHEAD: "Where things become somewhat unclear is the second half," Sue wrote. "Seasonality has changed and we can't exactly discern if glass purchasing habits have become front-end loaded this year."
STOCK PERFORMANCE: Shares of the Corning, N.Y.-based company lost nearly 32 percent during the quarter to close at $20.84 at the end of March. The stock has gained about 25 percent since then.
