Corning Modestly Outperforms

Corning Incorporated (GLW - Analyst Report) reported earnings per share for the third quarter of 2009 of 41 cents, beating the Zacks Consensus Estimate of 39 cents. Quarterly sales were $1.5 billion, up 6% sequentially.

Display Technologies combined glass volume, including Corning’s wholly owned business and Samsung Corning Precision Glass Co., Ltd. (SCP), increased 4% over a very strong second quarter. Volume in the company’s wholly owned business was consistent with the second quarter, while SCP’s volume increased 7%. Glass pricing was comparable to the previous quarter.

Sales in the Display Technologies segment were $679 million, slightly higher than the second quarter. Third-quarter sales were impacted by an earthquake in Japan that affected production at the company’s LCD facility in Shizuoka in August. Display sales were positively impacted by foreign exchange rate movements in the quarter.

Telecommunications segment sales were $450 million, an increase of 3% over the previous quarter. The segment saw continued strength in optical fiber sales in China, as well as strong demand for private network products in North America. The growth rate was impacted by a slowing of fiber-to-the-home demand in North America.

Environmental Technologies segment sales were $167 million, an increase of 27% sequentially, driven primarily by automotive product sales increases in the United States, China and Germany.

Specialty Materials sales were $90 million, a 27% increase over quarter two.

Life Science sales were $92 million, compared to $81 million in the second quarter.

The company’s gross margin for the quarter was 41%. Equity earnings were $418 million, an increase of 16% over last quarter and an all-time record for Corning. Corning completed the acquisition of Axygen Bioscience, Inc. for approximately $410 million.

For the fourth quarter of 2009, the company anticipates its Telecommunications segment sales to be down 15%, due primarily to seasonally lower demand in North America. Environmental Technologies segment sales are expected to be down between 10% and 15% sequentially. Specialty Materials segment sales are expected to be similar to the third quarter or down 5% and Life Sciences segment sales are expected to be up 25%, driven by the Axygen acquisition.

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