Corning expects profits and LCD glass shipments to drop in 4Q08
[Thursday 30 October 2008]
Corning has reported a slight sequential increase in its LCD glass shipments and a sharp sequential decline in overall profits for the third quarter, and it expects LCD glass shipments and overall profits to go down in the fourth quarter due to the worsening global economy.
Overall sales for the third quarter totaled US$1.56 billion, about even with the sales for the same period of last year, and down 8% from the second quarter of this year. Net income for the third quarter dropped 76% sequentially to US$768 million, but rose 24% on year. Earnings per share (EPS) were US$0.49 for the quarter.
Combined LCD glass volume, including Corning's wholly owned business and Samsung Corning Precision Glass (SCP), was up 2% sequentially and 18% year over year. Volume from Corning's wholly owned business decreased 10% sequentially and 2% year over year, while SCP's volume increased 12% sequentially and 38% year over year.
"During the third quarter we experienced the impact of a supply chain correction in our display business. We believe that worsening economic conditions are now affecting retail demand for several of our businesses and that this economic decline may be accelerating in the fourth quarter," said Wendell P Weeks, Corning chairman and CEO.
"In response, we have initiated actions to reduce capital spending, scale back some manufacturing operations, curb the rate of growth in research, development and engineering expenses and reduce overhead to manage costs. If business conditions deteriorate further, we will consider additional capacity and operational adjustments," Weeks added.
Corning expects its overall sales to drop to US$1.2-1.3 billion in the fourth quarter, with EPS going down to US$0.2-0.28. Combined LCD glass volume is expected to decline 10-20% sequentially, with shipments from the wholly owned business and SCP dropping 20-30% and 5%-15% respectively.
On-year combined glass volume is expected to decrease 2-13%. For the entire 2008, combined LCD glass volume growth is estimated at 20-22%.
Equity earnings from SCP's LCD glass business amounted to US$259 million for the third quarter, a 6% sequential gain and a 62% increase on year, which reflects continued strength in the Korean LCD market.
"Although our combined glass volume reflects strong year-over-year growth in the LCD glass market, we have seen lower demand in Taiwan and stronger demand in Korea. This trend is expected to continue in the fourth quarter," Weeks said.
"We now expect Taiwanese panel makers to run at much lower utilization rates through the fourth quarter as they prepare for a seasonally lower first quarter and potentially slower consumer demand for LCD televisions and monitors in 2009. Although utilization rates in Korea remain higher, we are starting to see softness in that market as well," said James B Flaws, vice chairman and CFO of Corning.
[Thursday 30 October 2008]
Corning has reported a slight sequential increase in its LCD glass shipments and a sharp sequential decline in overall profits for the third quarter, and it expects LCD glass shipments and overall profits to go down in the fourth quarter due to the worsening global economy.
Overall sales for the third quarter totaled US$1.56 billion, about even with the sales for the same period of last year, and down 8% from the second quarter of this year. Net income for the third quarter dropped 76% sequentially to US$768 million, but rose 24% on year. Earnings per share (EPS) were US$0.49 for the quarter.
Combined LCD glass volume, including Corning's wholly owned business and Samsung Corning Precision Glass (SCP), was up 2% sequentially and 18% year over year. Volume from Corning's wholly owned business decreased 10% sequentially and 2% year over year, while SCP's volume increased 12% sequentially and 38% year over year.
"During the third quarter we experienced the impact of a supply chain correction in our display business. We believe that worsening economic conditions are now affecting retail demand for several of our businesses and that this economic decline may be accelerating in the fourth quarter," said Wendell P Weeks, Corning chairman and CEO.
"In response, we have initiated actions to reduce capital spending, scale back some manufacturing operations, curb the rate of growth in research, development and engineering expenses and reduce overhead to manage costs. If business conditions deteriorate further, we will consider additional capacity and operational adjustments," Weeks added.
Corning expects its overall sales to drop to US$1.2-1.3 billion in the fourth quarter, with EPS going down to US$0.2-0.28. Combined LCD glass volume is expected to decline 10-20% sequentially, with shipments from the wholly owned business and SCP dropping 20-30% and 5%-15% respectively.
On-year combined glass volume is expected to decrease 2-13%. For the entire 2008, combined LCD glass volume growth is estimated at 20-22%.
Equity earnings from SCP's LCD glass business amounted to US$259 million for the third quarter, a 6% sequential gain and a 62% increase on year, which reflects continued strength in the Korean LCD market.
"Although our combined glass volume reflects strong year-over-year growth in the LCD glass market, we have seen lower demand in Taiwan and stronger demand in Korea. This trend is expected to continue in the fourth quarter," Weeks said.
"We now expect Taiwanese panel makers to run at much lower utilization rates through the fourth quarter as they prepare for a seasonally lower first quarter and potentially slower consumer demand for LCD televisions and monitors in 2009. Although utilization rates in Korea remain higher, we are starting to see softness in that market as well," said James B Flaws, vice chairman and CFO of Corning.