Corning earns $646 milllion in 4Q, helped by demand for flat-screen TVs

Corning Inc., buoyed by higher demand for liquid-crystal-display glass, posted a $646 million profit in the fourth quarter but warned Wednesday that falling prices will drag profits and sales below Wall Street expectations in the current quarter.

The glass, fiber optics and specialty materials company earned the equivalent of 41 cents a share in the October-December period compared with a loss of $33 million, or 2 cents a share, in last year's fourth quarter when it recorded hefty tax-related costs.

Excluding asbestos litigation and other one-time gains of $158 million, or 10 cents a share, earnings totaled $488 million, or 31 cents a share, in the latest period.

Sales rose 14 percent to $1.37 billion from $1.2 billion a year ago.

Analysts surveyed by Thomson Financial had forecast earnings of 28 cents a share on sales of $1.3 billion.

Its shares rose $1.62, or 8.6 percent, to $20.46 in morning trading on the New York Stock Exchange.

Revenues were helped by strong performance at the company's affiliates, Dow Corning and Samsung Corning Precision Glass, which make LCD glass substrates.

Corning's display technologies sales rose 19 percent to $619 million from $518 million a year ago as LCD glass volume surged 48 but this was largely offset by price declines.

Sales in Corning's telecommunications unit fell 11 percent to $404 million from $456 million mainly because of lower prices and lower volume.

For the first quarter, Corning expects sales of $1.26 billion to $1.31 billion and profits of 24 cents to 27 cents a share before special items. Analysts had expected income of 28 cents a share on sales of $1.34 billion.

First-quarter glass volume in both Corning's display technologies business will be down 10 percent to 15 percent compared to the fourth quarter.

"This sequential volume decline reflects the seasonality of the LCD-TV market as television becomes a larger part of the LCD industry," said Corning's chief financial officer, Jim Flaws.

"We anticipate that this seasonality decline may fall more heavily on Corning in quarter one due to our overall market share and our new pricing strategy. We expect to see our total glass volume increase significantly as the market expands in the second half of this year."

Based in western New York, Corning commands an estimated 55 percent of the global market for LCD glass, which accounts for about 38 percent of its revenue.

James Houghton, the iron-willed patriarch who came out of retirement to guide Corning's recovery from the telecommunications crash of 2001, retired in May as an active employee of the pioneering glass company his great-great-grandfather founded in 1851.

For all of 2006, Corning earned $1.85 billion, or $1.16 a share, versus $585 million, or 38 cents a share, a year ago. Revenue rose to $5.17 billion from $4.58 billion a year ago.

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