Corning Falls on Unclear Glass View

Date: 6 December 2011
Source: Corning Incorporated/
Corning Inc.slashed its fourth quarter Gorilla Glass sales outlook when a major South Korean customer dishonored its glass display purchase contract.

Corningcut its Gorilla Glass fourth quarter sales forecast to a sequential decline of 25% from a 15% sales decline. LCD glass prices are also expected to decline sequentially in the fourth quarter. As a result, consolidated equity earnings are expected to be down 30% as opposed to down 5% guided originally.

Corning had taken the initiative to recapture its market share in Korea by cutting prices. But unfortunately, its long-term contract fell through because the supply of LCD glass outpaced demand, causing share prices to plunge 10%. Hence, the company plans to reduce its glass capacity in the fourth quarter by delaying the start of new tanks.

Corning makes Gorilla Glass for LC TVs, smartphones and tablet computers. Management believes that Corning’s Gorilla Glass outlook clearly indicates lower global demand for cover glass used in tablet computers and LCD TVs.

The lower adoption of Gorilla Glass on TVs and decline in tablet demand are matters of concern. We do not expect much improvement in the near term as glass price decline is also expected to continue, resulting in weaker-than-expected results in the fourth quarter and beyond.

However, a few analysts indicated that Amazon (AMZN - Analyst Report) is using Gorilla Glass in its ‘Kindle Fire.’ With preliminary sell-through data points for Amazon Fire appearing to be strong, we expect the demand for Corning´s glass substrates to improve in the near future.

Corning faces significant competition due to excess capacity in the market place, price pressure and product launches. For hardware and equipment products, significant competitors are 3M Company

Tyco Electronics, Ltd.

Furukawa OFS, CommScope and ADC Communications.

Currently, Corninghas a Zacks #3 Rank, which implies a Hold rating on a short-term basis.

600450 Corning Falls on Unclear Glass View
Date: 6 December 2011
Source: Corning Incorporated/

See more news about:

Others also read

Joint study by Corning and Ford showcases the benefits of using Gorilla Glass for Automotive in windshield applications.   Random stones are one of the biggest reasons windshields need replacing.
Corning hosts second Glass Summit to inspire new thinking about emerging applications for glass.   Glass experts from Corning, academia, funding agencies, and other facets of the industry meet and discuss the future direction of glass science around the globe.
Iris™ Glass earns honors for enabling thinner displays with low-color shift - Corning Incorporated’s light-guide plate solution, Iris™ Glass, has received a 2016 Display Component of the Year award from the Society for Information Display (SID).
Corning Incorporated today announced the results of a recently delivered joint research paper with the Ford Motor Company about the damage resistance of thin, lightweight glass for automotive windshields.
Corning’s specialty glass is finding myriad new applications in industries such as retail  Corning first introduced its vision for advanced glass technologies back in 2011 with its “A Day Made of Glass” video series.
Glass Performance Days (GPD) will present a Learning Event entitled "The Art of Modern Glass Architectural Applications" on Thursday 10th March, in co-operation with The Glass Innovation Institute and alongside the Glass Window and Door Expo in Istanbul, Turkey.

Add new comment