Corning Drops After Predicting Lower Prices for LCD Screens
Corning Inc. (GLW) tumbled the most in more than a year after projecting price declines for liquid crystal displays, the technology used in televisions and computer monitors.
Corning shares fell 6.2 percent to $17.10 at the close in New York, the biggest one-day decline since October 2012. About 41.2 million shares changed hands, or 3.4 times the average daily volume during the last month. Today’s decline erased the gains in 2014, dragging the shares down to a 4 percent slump for the year.
LCD prices will drop more than in previous periods, the Corning, New York-based company said today in a statement. The decrease will be compounded by the unit’s traditional first-quarter dip in volume from the previous three-month period, the company said. The display unit’s sales dropped 5 percent in the fourth quarter from a year earlier, excluding currency changes and other items.
“We believe this is a one-quarter phenomenon,” Chief Financial Officer James Flaws said on a conference call. Corning’s contracts allow customers to pay less when competitors cut their prices, the biggest reason behind the first-quarter drop in prices, he said.
Corning posted fourth-quarter adjusted earnings per share of 29 cents, topping the average analyst estimate of 28 cents. Net sales fell 8.9 percent to $1.96 billion. Analysts had projected $1.93 billion.
Fourth-quarter sales volume for Gorilla Glass, the shatter-resisting material used to cover Apple Inc. (AAPL)’s iPhone, was worse than the company had expected, Flaws said in an interview. Volumes of Gorilla Glass, also used in smartphones by Samsung Electronics Co., were hurt by weaker demand for touch-screen laptop computers, Flaws said.
“That was a little bit of a surprise,” he said. “We’ve been expecting that to grow faster and that’s been a disappointment to us.”
Yesterday, Cupertino, California-based Apple reported iPhone sales that missed analysts’ estimates for last year’s holiday season. IPhone volume didn’t hurt Corning’s sales last quarter, Flaws said.
Demand for display material to be used in tablets remains strong, and sales for those devices should grow in 2014, he said. He said Corning is also in talks with mobile-phone makers who are interested in one of the company’s newest products: antimicrobial glass. Though no contracts have been signed with smartphone producers, the material could keep touch screens from being a haven for germs, giving device manufacturers a new feature to sell.
The germ-repellent material is already being used in a furniture maker’s touch-pad control panel for conference rooms, Flaws said.
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