Corning Meets Guidance Despite Lower Glass Sales

Corning Inc. posted second-quarter sales of $1.26 billion and net income of $514 million, or 32 cents per share. These results include net special gains of $93 million, or 6 cents per share.

Corning (Corning, N.Y.) met the lowered second-quarter guidance issued in May, when it warned of slowing LCD glass sales.

Overall, second-quarter sales rose 11 percent year-over-year. Second-quarter sales for Corning's Display Technologies segment were $461 million, an 11-percent increase over 2005 second-quarter sales of $415 million. Year-over-year liquid crystal display (LCD) glass volume increased by 38 percent in the second quarter, but this was largely offset by the change in foreign exchange rates and price declines.

Sequentially, second-quarter LCD glass sales declined 16 percent from first-quarter sales of $547 million, primarily due to volume declines of 14 percent and lower prices.

Total LCD glass volume, including both Corning's wholly owned business and SCP, declined 6 percent sequentially in the second quarter. Net income for the Display Technologies segment was $344 million, down 18 percent from $417 million last quarter, but up 20 percent from a year ago.

Second quarter gross margin was 43 percent, a slight decline from the previous quarter's 45 percent.

Wendell P. Weeks, president and chief executive of Corning, said in a statement, "We were pleased to meet our earnings-per-share (EPS) guidance as we overcame the impact of the second-quarter panel inventory correction on our Display Technologies segment. The decline in Display Technologies' quarterly performance was offset by strength in our Telecommunications segment and lower operating expenses."

Corning expects third-quarter sales to range from $1.26 billion to $1.33 billion, and earnings per share of 22 to 26 cents before special items. Gross margin is expected to range from 41 to 43 percent.

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600450 Corning Meets Guidance Despite Lower Glass Sales
Date: 26 July 2006

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