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Corning shares hit five-year low on poor Q4 forecast

Shares of Corning Inc tumbled 17 percent to a five-year low on Tuesday after the specialty glass maker lowered its fourth-quarter sales and profit guidance to reflect slumping demand for glass used in flat-screen televisions and computers.

Fourth-quarter profit will be at the low end or below a previous projection of US$0.20 to US$0.28 a share, the company said. Sales are expected to fall below previous guidance of US$1.1 billion to US$1.2 billion.

The world’s largest maker of liquid-crystal-display glass also said it was withdrawing previously disclosed guidance for next year. As the global economy worsens, consumers are reining in purchases of LCD-TVs and industry analysts expect the drop in sales will be more severe next year.

DisplaySearch, a Texas-based market research firm, expects to pare back its prediction of 30.2 million LCD-TV shipments in North America this year by just “a million or 2 million units,” analyst Paul Gagnon said. “Most of the impact won’t be felt until next year.

“Currently we’re projecting about 130 million shipments worldwide” next year, up from around 102 million this year, he said. “That might come down, in the best case scenarios, by maybe 10 million units. But it could get worse, especially if the recovery takes a lot longer to materialize.”

Corning’s stock slumped US$1.53 to US$7.48 in afternoon trading on the New York Stock Exchange, its lowest level since August 2003.

When Corning posted third-quarter results on Oct. 29, it warned that slowing demand for LCD glass would sharply curtail sales and income in the fourth quarter. It also said it planned to idle some glassmaking operations and trim jobs in Taiwan and possibly Japan.

“The retail environment and the LCD supply chain are both extremely uncertain,” CFO Jim Flaws said in a statement at a conference in New York on Tuesday. “As a result, since the display business is a significant contributor to our overall results, we are unable to offer revised guidance for the fourth quarter or for 2009 at this time.”
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