Net income was $108 million, or $0.07 per share, compared with a net loss of $22 million, or a negative $0.02 per share, a year earlier. Additionally, the fiber optic and liquid crystal display (LCD) glassmaker said that it expects third-quarter sales to hit $950 million to $1 billion and EPS to come in at $0.10-$0.12.
Behind the improved outlook is the strong growth in the LCD market, for which it is increasing capital spending for the year to $950 million to $1 billion to keep up. I took a much more in-depth look at this market earlier in the year in a commentary titled Corning Corners LCD Market.
The gist is that while the flat-panel manufacturers are struggling with tight margins, Corning has managed to maintain relatively high margins for the glass used in these products. The square footage of glass sold increased 80% from a year earlier, and sales were at capacity. The high demand is expected to continue for the foreseeable future.
Fiber-optic cabling was still a sore spot for the company, with a $21 million net loss. The fiber companies have high hopes that the market will improve via a residential rollout. SBC (NYSE: SBC) has committed $6 billion to it. If that happens, it could even revive Lucent (NYSE: LU), but it's likely a very long way off from being a big revenue source.
Corning was also accused in June by the Chinese government of dumping cable into its market, but the company doesn't expect the repercussions to amount to more than a penny per share in the second half of the year. It ships about 6% of its cable to China.
So for the time being, it looks as though it's still going to be all about glass for this company. And it doesn't appear to have reached a glass ceiling yet. It's in the process of getting another plant up and running in Taiwan, which it expects to fire up in late 2005.