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Corning Inc. could get boost from World Cup soccer
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Could soccer be the financial salvation of Corning Inc. this year?
That's one of the more unusual theories circulating in the financial community with the approach of the World Cup soccer tournament in June.
Although it barely registers among Americans, the World Cup draws more TV viewers worldwide than any other sporting event. Speculation is that fans will rush to buy big-screen, flat-panel TVs in order to get ready for the 64 World Cup matches that begin in Germany on June 9.
How big is the potential market? The tournament is expected to draw 30 billion (yes, billion) viewers, according to soccer's ruling body, FIFA.
Since Corning Inc. makes more than half the world's supply of flat-panel glass that goes into liquid crystal display televisions, it stands to reason that the company will benefit if the buying frenzy among soccer fans materializes.
There is some precedent for believing that the World Cup will spur television sales. The world's largest maker of liquid crystal display TVs, Japan's Sharp, already saw sales increases from the 2002 World Cup matches in South Korea and Japan.
Research firm iSuppli predicts that sales of liquid crystal display and plasma televisions will jump 31 percent this year to $47 billion. How much of that is attributable to the World Cup matches is not clear.
Stocks of companies such as Corning Inc. and major display makers Samsung Electronics and LG.Philips LCD Co. are expected to benefit if the World Cup impact occurs as predicted.
Optimism about prospects for liquid crystal display television sales this year already caused a New Year rally in Corning Inc. stock this past week. Strong sales of the flat-panel TVs in the first quarter could be more good news for the stock.
Globally, sales of liquid crystal display TVs are expected to increase 39 percent this year, to $33 billion, while plasma TV sales are expected to increase 14 percent to $14 billion, according to iSuppli.
If falling prices for liquid crystal display TVs combine with increased demand by World Cup soccer fans, Corning Inc. will see the benefits both in its earnings and its stock price.
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January 16th, 2006
Source: Stargazettenews.com |
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