JULY 2008 W5 ALERTCorning Says Economy’s Cloudy…Our Glass Business Isn’t
Major Glass Maker’s Second Quarter Results Disappoint Analysts
<Reuters><July 30, 2008>Reuters is reporting that Corning, Inc. posted quarterly results that were below analyst expectations. The results were impacted by a manufacturing “glitch” that has been resolved and slowing demand as a result of over-inventory in the supply chain.
Why do we care? Because Corning is the world’s largest manufacturer of glass used in the production of LCD television sets and computers. The company has said there is a slowing of orders from their customers due to over-inventory.
Corning views the current situation as temporary and has not changed their forecast for the remainder of the year. Corning Chief Financial Officer Jim Flaws said, “We expect some of the excess inventory has been built in anticipation of tight panel supplies in the second half. If retail strength continues as expected, fueled by lower retail pricing, we expect that excess inventory in the supply chain can be worked off.”
The Corning CFO sees 32-inch flat panel televisions, the most popular size right now, selling for $400 - $500 at retail stores this holiday season.
Corning reported sales of $1.69 billion or 19 percent over last year…but short of the $1.72 that analysts were expecting.
Net income was reported at $3.2 billion up from $489 million last year and excluding special items came in at 49 cents per share, which was in line with analyst’s expectation.
“This (economic) worry has been with us all year and each month we still see consumers buying televisions,” Flaws said. “We cannot guarantee they’ll continue to do so, but we are encouraged by the resiliency of television purchases in the United States.”
(Photo: Reuters)