Corning profit beats, but smartphone glass sales fall

Corning profit beats, but smartphone glass sales fall
(Adds details on business segments, shares)

April 24 (Reuters) - Telecoms parts producer Corning Inc beat expectations for profit on Tuesday thanks to optical fiber cable sales, but a drop in sales in its screen glass unit added to growing market nerves about demand for high-end smartphones.

Shares of Corning, whose toughened Gorilla glass is the screen of choice for smartphones including Apple's iPhone and Samsung's Galaxy, rose 2 percent in trading before the bell.

At least two other Apple suppliers - contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd and chipmaker AMS - have pointed to soft demand from smartphone customers in the past week. Analysts have attributed the softness to weaker-than-anticipated demand for the Californian firm's iPhone X.

Global sales of smartphones to end users totaled nearly 408 million units in the fourth quarter of 2017, a 5.6 percent year-over-year decline for the first time, Gartner Research said in February.

Corning said on Tuesday net sales in its specialty materials business, which makes Gorilla Glass, fell 7 percent to $278 million in the first quarter, missing analysts' estimate of $293 million, according to Thomson Reuters I/B/E/S.

Sales in its LCD glass business, used in televisions and PCs, also declined 5 percent to $745 million, below Wall Street estimates of $747.5 million.

The only bright spot was the demand for optical fiber cables as telecom companies invest in upgrading their networks ahead of the rollout of 5G.

The industry will spend $225 billion on 5G between 2019 and 2025, according to a research note published by Morgan Stanley in October. (

Net sales from Corning's optical communications business, which makes fiber optic cables and connectors and contributes nearly one-third to its total sales, rose 8 percent to $886 million.

Corning's net loss was $589 million, or 72 cents per share in the first quarter, compared with a profit of $86 million, or 7 cents per share, a year earlier.

On an adjusted basis, Corning earned 31 cents per share on revenue of $2.51 billion. Analysts on average had expected a profit of 30 cents per share and an adjusted revenue of $2.49 billion. (Reporting by Laharee Chatterjee in Bengaluru; Editing by Maju Samuel and Patrick Graham)

First Published: 2018-04-24 13:20:32
Updated 2018-04-24 14:50:06

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