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Published: Wednesday, 4/27/2011

Corning 1Q profit falls 8 percent but demand for LCD-TV glass jumps


ROCHESTER, N.Y. — Specialty glass maker Corning Inc. said Wednesday its first-quarter profit fell 8 percent, largely because of a higher tax rate. But its revenue surged 24 percent on robust sales of glass for flat-screen televisions, computers and mobile devices.

The results beat Wall Street expectations. Its shares rose 3 percent in morning trading.

The world's largest maker of liquid-crystal-display glass said its net income fell to $748 million, or 47 cents per share, in the January-March period, down from $816 million, or 52 cents per share, a year ago.

The company attributed the decline mainly to an increase in its tax rate to 13 percent from 3 percent last year. The earnings were still 3 cents a share higher than analysts surveyed by FactSet had expected.

Revenue jumped to $1.92 billion from $1.55 billion a year ago. Analysts expected $1.8 billion.

Corning saw year-over-year and sequential growth in all five of its business units — from LCD-TV and Gorilla cover glass to auto-pollution filters, research labware, and optical fiber and cable.

"We are succeeding at building a bigger, more balanced company," Corning's chief financial officer, Jim Flaws, said in a conference call with analysts. "We strongly believe that every one of our segments will have significant growth this year and over the next several years."

Revenue from Corning's display technologies segment edged up 1 percent to $790 million, with glass volume rising 5 percent as predicted. The company said it expects glass volume in the April-June quarter to be consistent with the first quarter.

DisplaySearch, a market-research firm in Austin, Texas, estimates that 217 million LCD-TVs will be shipped worldwide in 2011, up 13.2 percent from 2010. In North America, shipments are expected to rise 5.8 percent to 40.5 million units.

While LCD glass is Corning's biggest business by far, the 159-year-old company also makes ceramic auto-pollution filters and is the world's largest producer of optical fiber and cable. Based in western New York, it employs 24,500 people.

Propelled by ultra-strong Gorilla glass, which is now migrating from handheld and tablet devices to high-end TVs, specialty materials revenue more than doubled to $254 million.

Corning has said sales of Gorilla glass could surge to $1 billion this year from $250 million in 2010. Sony Corp. is incorporating Gorilla glass in a new line of Bravia TVs this year. Invented in 1962, Gorilla found commercial use only in 2008. LG Display Co. and Asahi Glass Co. make competing products.

Revenue in Corning's telecommunications unit jumped 30 percent to $474 million on higher demand for fiber-to-the-home products in North America and Europe. The company said it churned out more optical fiber in March than in any month in its history.

Environmental technologies sales jumped 35 percent to $192 million, driven by higher-than-expected demand for auto-pollution filters.

Corning shares rose 61 cents, or 3 percent, to $21.21 in morning trading. It is trading at the upper end of a 52-week range of $15.45 to $23.43.

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