July 29 (Bloomberg) -- Corning Inc.’s profit missed analysts’ estimates as demand for Gorilla Glass, the hard cover glass used for smartphones and tablets, was weaker than the company expected. The shares fell the most since 2012.
Second-quarter earnings, excluding some items, of 37 cents a share fell short of the 38 cents that analysts had estimated on average, according to data compiled by Bloomberg. Core net sales rose 28 percent to $2.58 billion, the Corning, New York-based company said today in a statement. Analysts had estimated $2.53 billion.
Corning said weaker than expected demand for Gorilla Glass for tablets hurt sales in the quarter. The company lowered its forecast for cover glass shipments, which are now projected to rise 20 percent for the year, down from a prior projection of more than 24 percent growth.
“We just got that really wrong about what was happening in the tablet market, and we have adjusted down our forecast for that dramatically compared to our original expectations,” Chief Financial Officer Jim Flaws said on a conference call today with analysts and investors. “That is overwhelmingly the impact in the reduction of what we expected for growth for Gorilla this year.”
Corning fell 9.3 percent to $20 at the close in New York, the biggest decline since October 2012. The stock is still up 12 percent this year.
Specialty materials, including cover glass, make up about 15 percent of Corning’s sales. Gorilla Glass is the highest-margin product the company sells.
Corning also said LCD glass price declines are moderating in the third quarter and expected to return to 2013 levels. The volume of glass sold rose more than the company anticipated because of retail TV sales in Europe and South America, likely bolstered by viewing of the World Cup.
Display glass contributes about a third of the company’s revenue.
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