Corning Inc. banks on Flaws’ prediction

Jim Flaws had better be right.Flaws, Corning Inc.’s chief financial officer, thinks soaring energy prices won’t keep consumers from buying expensive liquid crystal display televisions.

If he’s right, 2006 could be a very good year for Corning Inc. indeed.If he’s wrong, the stock of the Twin Tiers’ largest employer could be worth about as much as Confederate money this time next year.Corning Inc. makes the high-tech, flat-panel glass that goes into the wall-size televisions that sell for thousands of dollars.Soaring sales will mean higher demand for glass and higher profits for Corning Inc.But if consumers decide that the predicted 70 percent increase in natural gas bills this winter means they can wait for a super-sized TV, Corning Inc. is suddenly out of options.Liquid crystal display glass is the company’s only profitable business.The diesel pollution control business is promising, but heavy investment is eating up any potential profit.The same is true in the company’s life sciences business.

And telecommunications? It’s still declining and losing money, despite optimism over projects like the national optical fiber rollout of Verizon Communications.

Flaws has reasons to be optimistic, of course.

The people who buy TVs the size of a pickup truck bed generally don’t have trouble paying their heat bills. But you can sell only so many of the fancy TVs to Donald Trump and Bill Gates.

Back in the economic real world, where people punch time clocks and shop at Wal-Mart and don’t get stock options by the truckload, the promised energy crunch will force some difficult decisions.

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600450 Corning Inc. banks on Flaws’ prediction
Date: 31 October 2005

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